Lagarde stated that there will be a quarter-point increase in interest rates in July and that they will act more quickly if the inflation threat increases.

Speaking at a banking forum in Portugal, Lagarde reiterated her plan for a 25 basis point rate hike at the July meeting, saying she was ready to move faster if needed. She said if they see higher inflation threaten expectations, they will act.

She stated that the magnitude of energy and food shocks created uncertainty in inflation and that inflation started to increase widely in the services sector.

“We will proceed on a gradual and sustainable path in interest rate increases after September,” Lagarde said.

The European Central Bank is preparing to raise interest rates for the first time in 10 years to contain record-high inflation amid concerns that cutting energy imports from Russia will trigger a recession. At the last meeting, ECB officials gave the message of a 25 basis point increase in interest rates.