European Central Bank President Christine Lagarde reiterated that borrowing costs will remain elevated for as long as needed to tame consumer prices — even as the economy struggles.

“Our future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary,” Lagarde told lawmakers in the European Parliament.

“We remain determined to ensure that inflation returns to our 2% medium-term target in a timely manner,” she said Monday in Brussels.

The ECB raised its key policy rate to 4% this month — a level most economists and investors reckon will be the peak in a more than yearlong campaign to stamp out inflation.

Some Governing Council have endorsed that assessment, with Spain’s Pablo Hernandez de Cos reiterating Monday that the current level should bring price growth back to the 2% goal if maintained for long enough. Bank of France Governor Francois Villeroy de Galhau, meanwhile, said the ECB shouldn’t test the economy “until it breaks” — a hint that the prefers not raising rates any further.

But some officials have been less certain that the high point has been reached. Bundesbank President Joachim Nagel said last week it’s too soon to make such declarations as inflation remains too elevated and is only forecast to decline slowly.

A key challenge is judging how the economy responds to the 450 basis points of monetary tightening enacted since July 2022. The euro-zone outlook has worsened lately, with Germany a particular weak spot. Business confidence there improved only marginally in September while remaining at historically low levels, data released Monday by the Ifo institute showed.

--With assistance from Bryce Baschuk and Bastian Benrath.