FRANKFURT: The European Central Bank (ECB) is “very unlikely” to raise its interest rates in 2022, president Christine Lagarde said on Wednesday, amid pressure on the central bankers to respond to soaring prices.

“Despite the current inflation surge, the outlook for inflation over the medium-term remains subdued,” Lagarde said in a speech in Lisbon.

And the ECB conditions for a possible rate increase “are very unlikely to be satisfied next year”, she said.

Previously, the ECB has said it will not increase borrowing costs until it sees inflation reaching its 2 per cent target “well ahead” of a projected timeframe.

Inflation would have to be at that level, or higher, on a durable basis throughout the remainder of the forecast period and be supported by data on underlying price pressures.

The ECB’s 25-member governing council last week held interest rates at historic lows, including a negative bank deposit rate, which means lenders pay to park excess cash at the central bank.

In its most recent forecast in September, the ECB is pencilling in an inflation rate for the euro area of 1.7 per cent in 2022 and 1.5 per cent in 2023.

But the recent high pace of inflation has turned pressure on the Frankfurt-based institution, with annual inflation hitting 4.1 per cent in October, according to Eurostat.

In view of the surge in inflation, the central banks are under pressure to row back the vast financial support put in place at the start of the coronavirus pandemic to support the economy.

While some had already lifted borrowing costs, the main focus is on the US Federal Reserve, which is expected to say on Wednesday when it will begin tapering its own massive bond-buying programme, with particular attention on the rates.