ECB says inflation still set to remain too high for too long

(Sharecast News) - The European Central Bank raised interest rates as expected, but judged that inflation was still set to remain too high for too long. Nonetheless, as ECB President, Christine Lagarde, said at her post-meeting press conference, the central bank was now in 'data dependent' mode.

She also stated that the policy decision at the next meeting, in September, might be a hike or a pause but would in any case depend on economic conditions.

That would also be true for subsequent meetings, she stressed.

Financing conditions had however continued to tighten and were dampening demand, the ECB said in its policy statement.

"The developments since the last meeting support the expectation that inflation will drop further over the remainder of the year but will stay above target for an extended period.

"While some measures show signs of easing, underlying inflation remains high overall."

Lagarde also went on to explain that monetary policy was now starting to be transmitted "strongly".

-- More to follow --