ECB’s Lagarde: ‘What We Do in September Is Wide Open'

18 July 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday said that there was no predetermined path for euro area interest rates and that the next Governing Council meeting in September would bring important data.

During the press conference following the Governing Council’s meeting, in which the ECB decided to leave interest rates unchanged, Lagarde said, ‘So the question of September and what we do in September is wide open and will be determined on the basis of all the data that we will be receiving.’

‘Obviously our projection from June will be a point of reference, but the projection of September plus the all the other elements that we will be receiving will be taken into account to decide what we do in September’, she elaborated.

Between now and September, the ECB would receive relevant information including on GDP, inflation, wages and profits that would confirm the disinflation process or not, she said.

Services inflation was still high and at this meeting the ECB did not have enough information on wages, profits and productivity, which was a source of uncertainty, she said, noting that ‘we'll have a lot more of that in the coming weeks and months.’

‘While we are on that disinflationary track at the same time, the domestic price pressures remain high and the interconnection between wage, profit and productivity can really constitute uncertainty around that path’, she said.

The ECB’s decision to keep interest rates unchanged was unanimously, she said, highlighting the need of strengthening confidence in the disinflationary process.

‘I think we are at the at the stage where with additional data -- not data point -- additional data, that will take multiple avenues and forms and that we will dissect in great detail in the weeks and months to come’, she said. ‘So, with additional data, if that data actually confirms the disinflationary process that is at work at the moment, it will reinforce our confidence.’

The euro area was seeing a recovery led by services and a ‘virtuous circle between high employment and services and consumption of services’, she said.

Asked about the assessment of the ECB’s strategic review, she said there should be an outcome to it at the second half 2025 and that the symmetric 2% inflation target and the adoption of dot-plot chart were excluded from the discussion.