Lorcan Allen: Can the ECB’s rates gamble burst the inflation bubble?

With the cost of essentials such as electricity and gas skyrocketing, it is expected that the ECB will soon raise interest rates to curb consumer demand – but such a move comes loaded with potential dangers

Christine Lagarde, president of the European Central Bank, says the risk now posed by surging inflation in Europe had ‘tilted to the upside’. Picture: Getty

Christine Lagarde knows that her words matter. The president of the European Central Bank (ECB) is extremely careful in everything she says in public, but especially so right now.

There is growing expectation in global financial markets that the ECB will be forced to follow the US Federal Reserve and the Bank of England and begin to increase its main interest rates in the second half of the year in a bid to rein in ...