European Central Bank says it is ready to “move faster” on rates if needed

European Central Bank President Christine Lagarde at the annual conference in Portugal on Tuesday tried to ease fears of a eurozone recession, saying that the Bank is ready to raise rates more swifty if inflation continues to rise.

The eurozone’s headline inflation rate is projected to be 6.8% this year, far over the ECB’s target of 2%.

“We have markedly revised down our forecasts for growth in the next two years. But we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum,” Lagarde said Tuesday at the Sintra Forum.

The sudden halt of Russian gas supplies to Europe in response to Moscow’s invasion of Ukraine, coupled with an energy crisis, has made it uncertain whether the eurozone would avoid a recession this year.

“If the inflation outlook does not improve, we will have sufficient information to move faster. This commitment is, however, data dependent,” Lagarde added Tuesday.

ECB confirmed in early June its intention to hike interest rates for the first time in more than 11 years by 25 basis points at the policy meeting next month, and it expects a further increase at the meeting in September. The ECB also lowered its growth projections.

Inflation in the eurozone accelerated to an all-time high in May at a fresh record of 8.1 percent rise from a year earlier.

The acceleration was driven by food and energy after Russia’s invasion of Ukraine sent commodity prices soaring. A gauge that excludes volatile items like those rose 3.8 percent.