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Lagarde: Outlook For Growth And Inflation Remain "Highly Uncertain"

ECB

Lagarde turns to the risks to the outlook for growth and inflation, which she describes as remaining "highly uncertain":

  • Upside risks to inflation remain from energy and food, and the war in Ukraine. Also, increases in wages and profit margins. Recent wage agreements in a number of countries have added to upside risks.
  • Downside risks come from financial markets or faster passthrough from monetary policy to slow the economy.
  • Financial stability outlook remains "challenging". Tighter financial conditions have raised funding costs. These factors could lead to systemic stress. But there are strong capital conditions, minimising some of these risks.

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