Lagarde: ECB Needs Time to Assess Inflation Uncertainties

The of the labor market is itself a reflection of the unusual mix off shocks that have hit the your area, with labor shortages leading firms to hoard more labor and higher profits and lower real wages, making it easier for them to do so. As a result, the usual propagation from slow growth to heightened unemployment risks and lower demand did not happen to the same extent at all. Now, we are still facing several uncertainties regarding future inflation, especially in terms of how the Nexus of profits, wages and productivity will evolve and whether the economy will be hit by new supply side shocks. And it will take time for us to gather sufficient data to be certain that the risks of above target inflation have passed. The strong labour market means that we can take time to gather new information. But we also need to be mindful of the fact that the growth outlook remains uncertain. And all of this underpins our determination to continue to be data dependent and to take our policy decisions meeting by meetings.