“There is a significant energy shock, but we are confident that inflation will return to 2%,” said European Central Bank President Christine Lagarde during her address to the European Parliament’s Committee on Economic Affairs. Following the energy spike linked to the war in the Middle East, “short-term inflation expectations have risen well above previous levels,” she noted, adding that “at present, the public does not expect high inflation to be persistent: most indicators of long-term inflation expectations stand at around 2%, supporting the stabilization of inflation around the target in the medium term.”
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