The Euro Area Hit by an Inflation Shock

The Euro area has been hit by an inflation shock, which is now working its way through the economy. While headline inflation is likely to decline steeply this year, driven by falling energy prices and easing supply bottlenecks, underlying inflation dynamics remain strong. We must and we will bring down inflation to our medium-term target in a timely manner," said Christine Lagarde speaking at the ECB and its Watchers Conference in Frankfurt.