ECB President Lagarde met with MEPs detailing the Bank’s strategy review and fielding questions on this as well as on inflation, financial stability, interest rates and climate change.
Speaking on Monday at her quarterly meeting with Economic and Monetary Affairs committee MEPs, Christine Lagarde detailed the key elements of the ECB’s new monetary policy strategy. She also informed MEPs that the ECB would be working to include the costs of owner-occupied housing in the HICP to better represent the inflation rate relevant for households, would develop a climate-related action plan to address climate change effects on price stability, and would be modernising its external communication. Acknowledging, during the debate, that inflation could increase further, Ms Lagarde however said that the signals showed that this would be temporary. Lead MEPs opening the questioning session focussed a number of their questions on obtaining more details about the strategic review carried out by the ECB as well as the current inflation rate and its forecasts. MEPs also asked about financial stability in a time dominated by ultra-low rates and how these rates were also having important consequences, not only on house prices but also basic consumer goods. Questions were also put to Ms Lagarde on why the ECB has not yet elaborated more clearly an integration of climate change into its bond buying policy and on certain meetings taking place in small committees with little communication on their outcomes. The future of the ECB’s Pandemic emergency purchase programme (PEPP) was also discussed, with MEPs expressing some worry that this would be wound down too early.
