By Ed Frankl and Don Forbes
Risks to the eurozone's inflation and economic growth are more balanced after the decline in energy prices in the last month, European Central Bank President Christine Lagarde said Wednesday.
"Risks...that we had to the upside on inflation and to the downside of growth are probably more broadly balanced than they were a few weeks ago as a result of what we are seeing," she said on a panel at the ECB's forum in Sintra, Portugal.
Oil prices declined to $72 a barrel in June from $120 a barrel in March, Lagarde noted. Price changes occurred at such a pace that central bankers should become prepared to measure them using different tools such as artificial intelligence, she added.
Inflation in the eurozone fell in June by more than expected, driven not just by lower fuel costs, but by cooling services prices, suggesting the recent energy-price surge hasn't broadened out cost pressures significantly to other areas of the economy.
The inflation data confirms the ECB will hold its key interest rate this month, economists say, but investors still expect at least one rate hike by the end of the year.
Write to Ed Frankl at edward.frankl@wsj.com and Don Forbes at don.forbes@wsj.com