ECB must place inflation concerns above growth, Lagarde says

FRANKFURT  – The European Central Bank must keep raising interest rates to tame inflation, even if the side effect of tighter policy will be weaker growth, ECB President Christine Lagarde said on Wednesday.

“We have return inflation to 2 percent in the medium term, and we will do what we have to do, which is to continue hiking interest rates in the next several meetings,” she told a conference. “If we were not delivering (on our mandate) it would hurt the economy far more.”

She added that the “first destination” of rate hikes will be to reach the neutral rate, which neither stimulates nor slows growth.