In a speech in London, Christine Lagarde, president of the ECB, gave no indications on the possibility of an increase or maintenance of interest rates in the coming week. Instead, Lagarde has preferred to focus on communication challenges in a time of uncertainty.
“Actions speak louder than words,” Lagarde said during a seminar in London organized by the European Economics & Financial Centre. “We raised our rates by 425 basis points over the course of 12 months – a record pace in a record time. And we will achieve a timely return of inflation to our medium-term target of 2%”.
On Sept. 14, ECB officials will have to assess whether the recent economic slowdown is enough to justify an initial pause in the tightening cycle that began more than a year ago.
Financial markets signal about a 25% chance rates will be raised by a quarter of a point next week, compared to 60% before macro data showed deterioration. Lagarde and colleagues will also carefully evaluate the ECB’s internal economic forecasts.