Pause in interest hikes is possible: "It's a decisive maybe"
The European Central Bank (ECB) might decide not to raise interest rates at its next policy meeting in September. That decision will depend on the available macroeconomic data at the time, president Christine Lagarde has said in a comment on the ECB's latest interest rate increase announced on Thursday.
Lagarde commented that she wanted to "break excessive inflation". But when asked if the ECB still had much to do to reduce inflation, the Frenchwoman admitted that it was too early to tell. "Do we have more ground to cover? At this point in time I wouldn't say so," Lagarde said, while stressing that the ECB's decisions will depend on the data available in September. "There is the possibility of another hike. There is the possibility of a pause. It's a decisive maybe."
"Do we have more ground to cover? At this point in time I wouldn't say so"
Even if the ECB leaves rates unchanged in September after nine consecutive hikes, that is no guarantee of an end to rate increases. "We look at the data again at every meeting," Lagarde reiterated.
She further warned that Russia's cancellation of the grain deal could cause higher food prices, fuelling inflation. However, geopolitical tensions could also cause a downturn in global trade.
ECB president Christine Lagarde © PHOTO Daniel ROLAND / AFP