Blaming Taylor Swift for inflation? You need to calm down, says ECB chief

As Europe grapples with stubborn inflation, some economists have been quick to point the finger at America's beloved popstar: Taylor Swift.

However, European Central Bank President Christine Lagarde says blaming the sequin-studded star for sticky inflation is ‘laughable.’

"It's not just Taylor Swift, you know," she said in an interview with CNBC at the ECB’s annual monetary policy conference. "Others have come as well."

Lagarde pointed out that other major artists, including Beyoncé, Bruce Springsteen, Pink, and Sting, have also been touring Europe recently, boosting consumer spending.

Lagarde’s response came after she was asked about the impact of Swift's tour on services inflation, one of the closely monitored inflation indicators for the ECB.

Eurozone inflation fell to 2.5% in June, down from 2.6% in May. That's not far from the ECB's 2% target. However, the stickiness of services inflation, which remained at 4.1% in June, remains a problem.

In response, economists were quick to blame Swift’s Eras tour, much to the ire of Swifites in all likelihood.

Lagarde isn't buying it. While acknowledging that "services inflation, which Swift's presence would contribute to, has remained elevated," she dismissed the idea that the singer was a meaningful contributor to the continent's price rises.

Instead, the ECB chief pointed to more fundamental factors, such as higher wages for service employees and rising business profits, as the key drivers of inflation.

‘Swiftlation’: more hype than substance?

The notion of "Swiftflation" or "Swiftnomics" has gained traction in recent months, with some economists attributing double-digit increases in hotel prices and billions in economic impact to the pop superstar's tour.

For example, Sweden's central bank recently reported that hotel prices rose 11% in May, fueled by "gig-trippers" following Swift across the continent - a bigger increase than when Beyoncé performed a year earlier.

A report by Barclaycard suggested that Swift's U.K. dates alone could deliver a £1 billion injection to the country's economy.

However, the Financial Times Alphaville investigated that report and found that the figures were based on small sample sizes and questionable assumptions, such as an average travel spend of £110.80 to get to her gigs and £60 on a meal beforehand.

The report admitted median figures, a more accurate representation, would have actually been much lower than that.

Europe continues efforts to shake off inflation

Lagarde's comments come as the ECB undergoes a significant policy shift. For the first time in five years, the central bank cut interest rates last month, reducing the target rate from 4% to 3.75%.

Despite some uncertainties in the data, Lagarde expressed confidence in the ECB's progress in taming inflation.

"We're very advanced on that disinflationary path," she said. "We are in that slow recovery that came about in the first quarter and which we hope will persevere."

Analysts now expect the central bank to cut rates twice more this year, in September and December.