‘It’s not just Taylor Swift’: ECB’s Lagarde says Eras Tour is not alone in keeping euro zone inflation high

‘It’s not just Taylor Swift’: ECB’s Lagarde says Eras Tour is not alone in keeping euro zone inflation high

Taylor Swift performs on stage during “Taylor Swift | The Eras Tour” at Aviva Stadium on June 28, 2024 in Dublin, Ireland. 

Charles Mcquillan/tas24 | Getty Images Entertainment | Getty Images

European Central Bank President Christine Lagarde said Tuesday that Taylor Swift’s Eras Tour is not alone in keeping inflation high across the euro zone.

Lagarde said that while services inflation remained sticky last month in the 20-nation bloc, coinciding with the European leg of Swift’s sell-out tour, it could not be attributed to just one performer.

“It’s not just Taylor Swift, you know,” Lagarde told Tech Zone Daily’s Sara Eisen in Sintra, Portugal. “Others have come as well.”

Lagarde was responding to a question about whether Swift’s tour boosted services inflation, one of the ECB’s closely watched measures.

The economic impact of Swift’s sell-out tour has been well documented and comes amid concerns that central banks may not be out of the woods yet in their fight against inflation.

Terms such as “Swiftflation” and “Swiftonomics” emerged last year following a surge in spending on services such as hotels, flights and restaurants around her performances. Analysts have even suggested that the impact on key U.K. inflation readings during her London dates could prompt the Bank of England to delay an anticipated September interest rate cut.

However, increased consumer spending around other major music tours, such as Bruce Springsteen, P!nk and Sting, are also said to be providing an economic boost.

“Services is the difficult one,” Lagarde noted, adding that “the jury is still out” on whether that stickiness is permanent.

Services inflation in the euro zone held steady at 4.1% in June, the European Union’s statistics agency said earlier Tuesday. Core inflation, excluding the volatile effects of energy, food, alcohol and tobacco, stayed at 2.9% from the prior month, just above the 2.8% economists had forecast.

Headline inflation, meanwhile, eased to 2.5% in June, down from 2.6% in May, in line with the expectations of economists polled by Reuters.

Largarde was speaking at the ECB’s annual monetary policy conference, where global central bankers are gathered to discuss the inflationary outlook and the future path for interest rates.

She added that the ECB was now “very advanced” in taming inflation, but noted that uncertainties remained.

“We’re very advanced on that disinflationary path,” she said. “We are in that slow recovery that came about in the first quarter and which we hope will persevere.”

The ECB cut interest rates last month for the first time in almost five years, reducing its key rate to 3.75% from a record 4%. Analysts now expect the ECB to cut rates twice more this year, in September and December.

— Tech Zone Daily’s Jenni Reid contributed to this report.

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