ECB Head Christine Lagarde believes that consumer inflation in the eurozone will eventually decrease, and warned that tightening monetary policy at this stage could negatively affect the recovery of the region's economy.
The latest data for the eurozone showed that consumer inflation rose to 4.1% in October amid a significant increase in the cost of energy. Thus, inflation turned out to be twice as high as the ECB's target of 2%.
Lagarde said that the ECB should continue to support the economy in the process of its recovery.
"We expect inflation pressures to ease, so there is no need to tighten policy," she said.
The ECB should announce its decision on its bond purchase programs at the next meeting (December 16).
Meanwhile, Lagarde noted that asset purchases will remain an important component of the ECB's toolkit after March 2022, when the completion of the pandemic emergency purchase programme (PEPP) is expected.
The head of the ECB warned that if monetary policy is tightened now, it could trigger a reduction in household incomes, which in turn will slow down economic growth.
While Lagarde acknowledged that the outlook for inflation had improved after a prolonged period of extremely weak price growth, she said the ECB should "support" demand.