FRANKFURT, May 8 (Reuters) - The European Central Bank is well placed to react to a rise in inflation as an increase in the cost of oil pushes up retail fuel costs and makes production more expensive in the euro zone, ECB President Christine Lagarde said in a letter on Friday.
"Fossil fuel price shocks spill over directly into inflation, with an immediate pass-through to retail energy prices," Lagarde said in response to a question from European lawmakers, adding higher input prices may be passed on to consumers.
"Thanks to its meeting-by-meeting approach, without a pre-commitment to any particular rate path, (the ECB) is well placed to react quickly as and when needed," Lagarde said.
(Reporting by Francesco Canepa; Editing by Alison Williams)