ECB president Christine Lagarde warns over climate change

Climate change is fuelling the cost of living crunch sweeping the globe, according to one of the world’s leading central bankers.

Christine Lagarde, president of the European Central Bank, said disasters such as droughts and famines can drive up prices.

Droughts can lead to shortages of everything from grain to beef, pushing up prices as supply fails to keep up with demand.

The comments came as central bankers grapple with soaring inflation as the cost of essentials such as energy and food rise.

Inflation in the eurozone is at a record high of 8.9 per cent while across the European Union it is 9.8 per cent. 

In the UK, inflation is at a 40-year high of 10.1 per cent.

Speaking to a French magazine, Lagarde said: ‘If more and more climate disasters, droughts and famines occur throughout the world, there will be repercussions on prices, on insurance premiums and on the financial sector.’