ECB should not react to current inflation spike, says Christine Lagarde

European Central Bank President Christine Lagarde said on Friday that inflation in the euro zone will fade so the ECB should not tighten policy as it could choke off the recovery, and hinted at continued bond purchases next year.

Inflation in the euro zone hit 4.1 per cent in October, pushed up by higher energy costs, and is expected to stay above the ECB’s 2 per cent target next year as suppliers strained by the pandemic cannot keep up with the reopening of the economy.

But Lagarde insisted the ECB should not hit the brake now bur rather keep adding fuel the