Lagarde defends hawkish ECB as analysts warn of 'more rate hikes to come'

The decision will automatically cost Irish households on tracker mortgages, and households refinance at higher rates at the expiry of their fixed-rate home loans

Christine Lagarde insisted the ECB didn't see "any trade-off" between fighting inflation and nurturing financial stability. File photo: AP/Michael Probst

Christine Lagarde, the head of the European Central Bank, strongly defended the decision to plough ahead with a hefty interest rate hike despite the turmoil swirling around global banks, warning that inflation was set to stay "too high for too long".

The ECB unveiled a further half-point increase on Thursday even after the weekend collapse of a number of US banks, including Silicon Valley Bank, and amid the woes of European banking giant Credit Suisse which required emergency funding on Wednesday night to keep going.