European Central Bank tweaks inflation target, bolsters climate role

The European Central Bank set a new inflation target on Thursday and carved out a major role in the fight against climate change, embarking on a fundamental transformation of Europe’s most powerful financial institution.

With inflation having undershot its target for nearly a decade, ECB President Christine Lagarde has driven an 18-month deep dive into the inner workings of the bank, challenging even core principles of central banking in the hopes of resetting strategy and bolstering credibility.

In the key conclusion of the review, the central bank of the 19 countries that share the euro set its inflation target at 2 per