Lagarde: Rates will remain at sufficiently restrictive levels for as long as necessary

<ul><li>Higher inflation forecasts mainly reflect higher energy</li><li>Rates will remain at sufficiently restrictive levels for as long as necessary</li><li>Rates were hiked to 'reinforce commitment to our target'</li><li>The economy is likely to remain subdued in the coming months</li><li>The services sector, which had been resilient, is now slowing</li><li>Recent indicators suggest a weak Q3</li><li>Labor market remains resilient</li><li>In the coming months inflation will fall</li><li>Most measures of underlying inflation are starting to fall</li><li>The risks to economic growth are tilted to the downside</li><li>We will continue to follow a data dependent model and stand ready to adjust all our instruments</li></ul><p>The euro sagged as she highlighted downside economic risks.</p><p>The forecasts were out earlier with the decision:</p><ul><li>2023 GDP at 0.7% (previously 0.9%)</li><li>2024 GDP at 1.0% (previously 1.5%)</li><li>2025 GDP at 1.5% (previously 1.6%)</li><li>2023 inflation at 5.6% (previously 5.4%)</li><li>2024 inflation at 3.2% (previously 3.0%)</li><li>2025 inflation at 2.1% (previously 2.2%)</li></ul>

This article was written by Adam Button at www.forexlive.com.