ECB must keep easy money policy in place despite inflation surge: Lagarde

FRANKFURT (Reuters) - The European Central Bank must keep copious stimulus in place as an unexpected surge in inflation last month masks weak underlying dynamics, ECB President Christine Lagarde said on Monday.

"Underlying price pressures are likely to remain subdued owing to weak demand, low wage pressures and the appreciation of the euro exchange rate," Lagarde told the European Parliament. "Our pledge to preserve favourable financing conditions is crucial in the current environment."

(Reporting by Balazs Koranyi; Editing by Alison Williams)

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