ECB, hasty rate hike would not solve inflation problems - Lagarde to Rnd!

FRANKFURT (Reuters) - Raising ECB interest rates now would not cool record eurozone inflation and would only hurt the economy.

This was stated by the president of the European Central Bank Christine Lagarde in an interview published today.

Lagarde sent bond markets into freefall last week by opening the door to the first rate hike by the ECB in over a decade in light of unceasing price pressure.

With money markets now pricing in an ECB deposit rate hike by 50 basis points by December, Lagarde warned that a rate hike would fail to counter the high oil prices and supply problems that have spurred inflation. 

"This would solve none of the current problems," Lagarde told German broadcaster Redaktionsnetzwerk Deutschland (Rnd). "On the contrary: if we act too quickly now, the recovery of our economies could be considerably weaker and many jobs would be at risk."

Lagarde reiterated that the ECB will withdraw its aggressive stimulus and negative interest rate policy gradually, and only when conditions permit.

"Now we can adjust - calmly and one step at a time - our monetary policy tools," he said. "And when economic data allows us to do it, we will."