Lagarde speech: Prolonged war could increase energy prices for longer

Christine Lagarde, President of the European Central Bank (ECB), explains the ECB's decision to leave key rates unchanged at the March policy meeting and responds to questions from the press.

Key takeaways

"Euro area growth is driven by services."

"Investment should grow."

"War is disrupting commodity markets, weighing on confidence."

"Any fiscal response to energy shock should be temporary, targeted and tailored."

"Indicators of underlying inflation remain consistent with 2% target."

"Corporate profits recovered, labour costs rose."

"Wage indicators point to continued moderation."

"Increase in energy prices will drive inflation above 2% in near term."

"Indirect effects would require close monitoring."

"Risks to growth outlook tilted to downside."

"A prolonged war could increase energy prices for longer, erode incomes."

"Deterioration in market sentiment may dampen demand."

"Trade frictions may disrupt supply chains."

"If war is proved to be short-lived, economy might get stronger."

"New technologies may drive up growth."

"Risks to inflation are tilted to upside especially in the near term."