Lagarde says fiscal response to energy shock must be targeted
Price caps and tax cuts must ‘preserve price signal’ or risk inflationary spiral, ECB president says
Christine Lagarde has said tax cuts and price caps aimed at shielding citizens from energy price hikes must be targeted and limited, or they will risk stoking long-term inflation.
In a speech in Berlin on April 20 at the Association of German Banks, the European Central Bank president said the design of fiscal policy would “shape the inflation outcome” of the energy price shock that had been triggered by conflict in the Middle East.
“Governments face strong pressure to cushion the blow for
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