Europe's central bank faces challenges from record inflation

Frankfurt: European Central Bank President Christine Lagarde has the job of explaining why the bank isn't raising interest rates despite record high inflation as it left its key economic stimulus programs in place.

The bank for the 19 countries that use the euro is moving more slowly than the US Federal Reserve and the Bank of England in withdrawing support as economies rebound from the worst of the coronavirus pandemic.

The Fed has signalled it could start raising interest rates in March,



while the Bank of England hiked rates on Thursday and in December.

Lagarde has said a hike from her bank is unlikely this year.

Europe's record 5.1 per cent inflation in January raises questions about when the bank will raise rates, the typical antidote to inflation that's too high.

The bank says much of the recent inflation is from temporary factors such as high oil and gas and clogged supply chains and should ease this year.