Europe’s outlook “darkening,” ECB head hedges on recession

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — The head of the European Central Bank says the economic outlook “is darkening” and she expects business activity to “slow substantially” in the coming months as high energy and food prices pushed up by the war in Ukraine sap consumer spending power. ECB President Christine Lagarde avoided predicting a recession in her remarks Monday to the European Parliament, saying the bank’s baseline scenario was subdued economic growth. But she appeared to hedge that by saying that some assumptions in that outlook — such as about the remaining supply of Russian natural gas — have been “overridden by events.” Lagarde said Russia’s invasion of Ukraine “continues to cast a shadow over Europe,” driving up the energy prices that are dampening consumer spending.