ECB wants to bring inflation back to 2%: Lagarde

March 16 (Reuters) – The European Central Bank is poised to take decisive action to bring inflation back to its 2% target in time, European Central Bank President Christine Lagarde said on Thursday after a meeting that saw the regulator raise interest rates by 50 basis points.

The European Central Bank set the interest rate at 3.50%, in line with the forecast of analysts polled by Reuters.

“The decision to raise the three key interest rates by 50 basis points is in line with our determination to ensure that inflation returns quickly to its medium-term target of 2%,” Lagarde said. “Inflation is projected to stay too high for too long.”

“Decisions on interest rates will depend on our assessment of the inflation outlook in the light of incoming economic and financial data, core inflation dynamics and the effectiveness of monetary policy,” added the head of the ECB.

Lagarde stressed that the regulator is closely monitoring the current market tensions and is ready to take the necessary actions to maintain price and financial stability in the eurozone, adding that European banks have strong capital and liquidity.

The labor market remains strong despite weakening economic activity, Lagarde said, and upward pressure on wages has increased due to recovery in labor markets and workers’ willingness to regain some purchasing power.

In any case, we are ready to adjust all our instruments within the mandate to ensure that inflation returns to its medium-term objective and maintain the effectiveness of monetary policy. (Thomas Kanik)