The president of the European Central Bank, Christine Lagarde, opened a “window for a new interest rate cut in October”.

Speaking today to the Committee on Economic and Monetary Affairs of the European Parliament, the head of the ECB appeared optimistic about the course of the de-escalation of inflation and the achievement of the quantitative objective set (2%) by the central bank, which, as she said, will be taken into account in the decision to be taken by the ECB on its interest rates on October 17 during the meeting of its Governing Council to be held in Slovenia.

“Inflation may have temporarily picked up in the fourth quarter of this year as previous sharp declines in energy prices are not factored into annual rates, but the latest developments reinforce our belief that inflation will return to target in time,” the Fed said. Lagarde, adding that this development “We will take this into account at our next monetary policy meeting in October”. ECB economists’ projections from September forecast inflation to average 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026.

“The new data available at the September Governing Council meeting strengthened our confidence in the timely return of inflation to the 2% target. As a result, we cut the deposit facility rate, which is the rate through which we steer the stance of monetary policy, by another 25 basis points to 3.5%.

We are determined to ensure that inflation returns to our medium-term target of 2% in time. We will continue to take a data-driven approach to determining the appropriate level and duration of restraint, focusing on the outlook for inflation, the dynamics of underlying inflation and the strength of monetary policy transmission. Policy rates will be kept sufficiently restrictive for as long as necessary to achieve our objective. We are not committed in advance to a specific course of interest rates,” said the president of the ECB.

On the contrary, Christine Lagarde appeared more restrained regarding the developments on the development front, pointing out that as shown by the development of some indicators, the recovery is facing problems. “We expect the recovery to strengthen over time as rising real incomes allow households to consume more,” he said. The latest projections by ECB economists predict that the GDP of the European economy will grow by 0.8% in 2024, 1.3% in 2025 and 1.5% in 2026.