ECB President Lagarde said the June 25bp rate increase was not a preventive move
against future inflation risks but a robust decision based on the economic and
inflation outlook at the time. She warned that without that hike, inflation
would have remained above the 2% target in 2027 and 2028, and that subsequent
developments, including lower oil, have not altered the ECB’s June assessment.
Lagarde said the ECB now has improved data, indicators and forecasts and will
follow a data-dependent, meeting-by-meeting policy approach rather than relying on
on forward guidance. She added that financial conditions often adjust to
incoming data and can transmit policy effects before formal decisions, giving
the ECB additional time to evaluate changes.
