European Central Bank President (ECB) Christine Lagarde said high energy prices are starting to feed through to other parts of the economy, according to an interview with France Culture.“Indirect effects of inflation, we have absolutely started to see that more or less everywhere in recent weeks,” she told the French station on Monday.The ECB last week hiked interest rates for the first time since 2023, with the war in the Middle East driving up price pressures. Officials aren’t ruling out a second increase as soon as their July meeting, with policymakers including Bundesbank President Joachim Nagel saying that prices are likely to stay elevated for longer even if the war in Iran were to end soon.The increases in borrowing costs are causing some ECB watchers to worry about the fallout on the economy.“So I hear criticism – often from France, and I understand them – ‘they’re taking measures and it will kill growth,’” Lagarde said “But I have to kill inflation if it awakens because if inflation gets out of the bottle, getting it back in again will be much more difficult and costly, and a long-term inflation situation is unacceptable for neither consumers not businesses, and I wouldn’t be fulfilling my mission.”The ECB chief spoke hours after the US and Iran said they reached an interim agreement to reopen the Strait of Hormuz.“If this news is confirmed by developments in coming days and the signature of a memorandum of understanding, it’s good news, we can only welcome it, above all if it means reopening and de-mining the Strait of Hormuz,” Lagarde said. – Bloomberg