Christine Lagarde: Commitment and persistence - monetary policy in the economic recovery

Keynote speech by Ms Christine Lagarde, President of the European Central Bank, at the 31st Frankfurt European Banking Congress 2021 "From Recovery to Strength", Frankfurt am Main, 19 November 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is a pleasure to speak to you this morning.

Today's conference focuses on adapting to the challenges of the post-pandemic world, which is crucial to ensuring that our economies can emerge from this crisis stronger. But as much as we need to look to the future, we still have hurdles to overcome in the present.

We are still in a phase where the economy is reopening and the effects of the pandemic have not yet fully played out. In particular, rising energy prices, supply bottlenecks and the withdrawal of physical distancing measures are causing considerable frictions in some sectors. This is being reflected in high inflation rates, which are likely to increase further until the end of the year.

This inflation is unwelcome and painful – and there are naturally concerns about how long it will last. We take those concerns very seriously and monitor developments carefully. In particular, we recognise that higher inflation squeezes people's real incomes, especially those at the bottom of the income distribution.