Euro zone facing slower growth, higher inflation: ECB’s Lagarde

Europe is facing slower growth and higher inflation as the war in Ukraine is draining confidence and pushing up energy prices, European Central Bank President Christine Lagarde said on Wednesday.

“We will face, in the short term, higher inflation and slower growth,” she said in a speech in Nicosia. “The longer the war lasts, the higher the economic costs will be and the greater the likelihood we end up in more adverse scenarios.”

Lagarde said that households are already becoming pessimistic and cutting back on growth while business investment is also likely to take a hit.