monetary policy statement press conference christine lagarde, president of the ecb, luis de guindos, vice - president of the ecb frankfurt am main, 8 september 2022 good afternoon, the vice - president and i welcome you to our press conference. the governing council today decided to raise the three key ecb interest rates by 75 basis points. this major step frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to our two per cent medium - term target. based on our current assessment, over the next several meetings we expect to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations. we will regularly re - evaluate our policy path in light of incoming information and the evolving inflation outlook. our future policy rate decisions will continue to be data - dependent and follow a meeting - by - meeting approach. we took today ’ s decision, and expect to raise interest rates further, because inflation remains far too high and is likely to stay above our target for an extended period. according to eurostat ’ s flash estimate, inflation reached 9. 1 per cent in august. soaring energy and food prices, demand pressures in some sectors owing to the reopening of the economy, and supply bottlenecks are still driving up inflation. price pressures have continued to strengthen and broaden across the economy and inflation may rise further in the near term. as the current drivers of inflation fade over time and the normalisation of our monetary policy works its way through to the economy and price - setting, inflation will come down. looking ahead, ecb staff have significantly revised up their inflation projections and inflation is now expected to average 8. 1 per cent in 2022, 5. 5 per cent in 2023 and 2. 3 per cent in 2024. after a rebound in the first half of 2022, recent data point to a substantial slowdown in euro area economic growth, with the economy expected to stagnate later in the year and in the first quarter of 2023. very high energy prices are reducing the purchasing power of people ’ s incomes and, although supply bottlenecks are easing, they are still constraining economic activity. in addition, the adverse geopolitical situation, especially russia ’ s unjustified aggression towards ukraine, is weighing on the confidence of businesses and consumers. this outlook is reflected in the latest staff projections for economic

different response of income and wealth inequality highlights the fact that we need to be more precise when defining exactly the " inequality of what " we are analysing. the recent pandemic emergency has shown the importance of another channel through which monetary policy may affect inequality, albeit largely indirectly. focusing on the first wave of infections, simulation results show that the public policies implemented in italy to support workers and households during the first half of 2020 were successful. the post - transfer gini index of the labour income distribution remained, in fact, almost constant compared to pre - crisis levels, instead of rising by several percentage points, as would have occurred in the absence of any intervention. actual data on household incomes have later confirmed these early assessments. monetary policy seemingly plays no part in this story. however, we should remember the severe tensions that arose in financial markets in march 2020. it is therefore reasonable to argue that introducing those public measures would have been much more difficult, even impossible, without the extraordinarily expansive monetary policy that was put in place, including the introduction of the ecb's pandemic emergency purchase programme and the strengthening of the asset purchase programme. although the " fiscal dominance " alarm bell may now be ringing for some of you, these considerations do not suggest that central banks have become dependent on national governments, but rather highlight the importance of the complementarities between fiscal and monetary policies. these complementarities not only concern the response to the deflationary pressures that we observed before and during the pandemic, but also affect, as we speak, the fight against inflation. the experience of italy, in this respect, is particularly insightful. in this country, the " conquest of inflation " took a long time, as we lived through the two dismal decades of the 1970s and 1980s. it has to be acknowledged that the economy was then subject to very severe shocks ( and if there is one thing that i have learned during my long experience in central banking, it is that we may only dream of steady states and the like! ). following the conflicts of the " hot autumn " of the late 1960s, a weak italian economy, and society, had to face the collapse of the bretton woods fixed exchange rates system and the two major oil shocks that followed the yom kippur war and the iran revolution. disinflation took place via a long process that only began in the early 1980s, with the strengthening of the central bank's autonomy and