Christine Lagarde

“We cannot ease financial pressure”: ECB president acknowledges struggles of Portuguese

But “fight against inflation” is priority

With the European Central Bank raising its key interest rates by 25 basis points, president Christine Lagarde has said she “cannot alleviate or mitigate” the pressure that has put on households in “countries like Finland, Portugal, Spain”.

“It is true that some households are suffering because the repayments they have to honour with the banks have gone up as a result of our decision to raise key interest rates. This is something that we unfortunately cannot alleviate or mitigate because our task is to achieve price stability and reduce inflation, and for that we have to use interest rates”, she said today.

Ms Lagarde is also cutting back on the “bazooka”, explain reports here.

“Governments should start withdrawing support for the economy”, said Lagarde – at odds with the message from Portugal’s head of State in his speech to the nation last night in which he said that the government could still do “more and better” in terms of helping struggling households.

The ECB’s recent interest rate hikes have been in the interests of a “rapid return of inflation to the 2% objective in the medium term”.

Dinheiro Vivo explains that the APP (Asset Purchase Programme) – considered to be the biggest cheap money bazooka – will be switched off in July. The programme was launched to help combat the crisis that still loomed over the eurozone at the end of 2014, says the online.

“The ECB has also demanded that governments remove public support in the energy field now” because it threatens to “intensify inflationary pressures”.

As for how long the pressure is to be maintained, ‘rapid return’ and ‘medium term’ boil down to “a long time”, admits the bank. “The inflation outlook continues to be too high for too long.”

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