Lagarde Warns Euro-Area Inflation Shock Will Outlast Expectations

European Central Bank president Christine Lagarde said the euro area's inflation shock will last longer than expected, citing ongoing conflict in the Middle East as a primary driver of continued price pressure.

Lagarde pointed to the Iran war as disrupting energy markets and contributing to volatility and pressure on energy prices, which are likely to persist even as higher costs raise the risk of slower growth.

The remarks come after the ECB's decision this week to increase its key interest rates, which was intended to help contain inflation but may penalize people planning to purchase homes or other assets.