Lucinda Creighton: Europe’s bankers and political leaders must act on inflation – and fast

European monetary policy should remain ‘flexible’, says Christine Lagarde of the ECB, but what’s really needed is an interest rate rise across the eurozone

Christine Lagarde, president of the European Central Bank: the ECB is concerned that Europe could experience an enormous economic contraction as the year goes on and wants to remain ‘flexible’. Picture: Getty

Inflation in the eurozone is running at its highest level since the creation of the single currency. While many are attributing this to the Russian invasion of Ukraine, inflation had actually spiked at 5 per cent across the eurozone in December 2021, two months prior to this.

In some countries the rise is even higher. It was running at 6.5 per cent in Belgium and 10.7 per cent in Lithuania, for example, last December. The ...