MNI BRIEF: HICP Inflation Unlikely To Have Peaked - Lagarde

Euro area inflation is unlikely to have peaked, ECB president Christine Lagarde said on Monday, with high wholesale energy prices not yet fully costed into in retail energy costs.

"I would like to see inflation having peaked in October, but I'm afraid I would not go as far as that," Lagarde told the European Parliament's Committee on Economic and Monetary Affairs, adding that she would be "surprised" if it had. Headline inflation touched a euro-era record high 10.6% y/y last month, with core inflation at 5.0%.

Despite ECB monetary policy and easing bottlenecks, inflation is unlikely to decline "in short order," she said, with risks to the outlook "to the upside, without qualifying the upside." However, she said the central bank would hike interest rates as "long and as high as is needed" to bring inflation back to target [...] Whether that will take us into restrictive territory, it may well be." (MNI INTERVIEW: ECB To Consider Smaller December Hike - Lane)