The European Central Bank’s next meeting could see a rate increase or a pause: Lagarde

According to president Christine Lagarde, the European Central Bank may decide to increase interest rates once more or take a break at its upcoming meeting, depending on the most recent statistics.

As it battles persistently high inflation, the central bank for the 20 nations that use the euro increased borrowing costs for the ninth straight day on Thursday.

Lagarde, though, raised hopes that the ECB might soon halt its protracted campaign of rate hikes by suggesting she was open-minded about future choices in remarks made following the meeting.

She emphasized that no decision has yet been taken about what the ECB would do at its next meeting on September 14 in an interview with French daily Le Figaro that was published on Sunday.

She responded, “I’ve heard some suggest the last rate hike will happen in September.

“There might be a halt or another increase in the policy rate. Any stoppage that happens in September or later would not necessarily be permanent.The inflation rate must reach its aim permanently.

According to her, decisions will be based on the most recent economic and financial facts.

At its September meeting, the ECB is expected to present its most recent projections, which include those for inflation and growth in the eurozone.

Even though it has been falling, June’s inflation rate of 5.5 percent was still much above than the ECB’s two-percent target.

However, since the eurozone entered a recession at the beginning of the year and the economy shrank for two consecutive quarters, there have been mounting worries about the effects of rate increases.

However, Lagarde praised the “quite encouraging” nature of the second quarter economic growth figures for Germany, France, and Spain that were made public on Friday.

The economies of France and Spain both expanded faster than forecast. Despite hopes for a minor recovery, the largest economy in Europe, Germany, stalled.

She also ignored the criticism of the rate rises coming from some nation’s governments, like Italy.

“You need to have a thick skin as a central banker,” she remarked.

And it’s crucial to remain focused on the goal of reducing inflation and to be as transparent as possible about the instruments used and the desired outcomes.