- European Central Bank President Christine Lagarde said the bank needed more time to conclude that inflation was firmly on track towards its 2% target, and that good economic developments suggested that another interest rate cut was not urgent.
- The European Central Bank cut interest rates for the first time in June, after the strongest wave of rate hikes, but refrained from committing to any subsequent moves, arguing that too much uncertainty prevented a second cut.
- "It will take some time to gather enough data to be certain that the risks of over-target inflation have passed," Lagarde said at the European Central Bank's forum of central banks on Monday.
- “The strong job market means we can take the time to gather new information,” she added.
- The ECB is trying to balance uncertainty over inflation with weak growth, and uncertainty may justify caution in cutting interest rates, but continued economic weakness strengthens the argument for monetary easing, which pushes the ECB in two conflicting directions.
- Lagarde acknowledged the dilemma, warning that the bloc's avoidance of recession was not guaranteed, despite a modest pick-up in growth in the last quarter.
- “A soft landing is still not guaranteed, we also have to take into account the fact that the growth outlook is still uncertain,” she said.
