Euro‑area activity has surprised to the upside and July bank lending accelerated, implying previous ECB hikes have not yet materially slowed the economy and leaving scope for further tightening. Senior economist Martin Wolburg says Lagarde is expected to adopt a ‘hawkish wait’ stance, keeping the door open to additional hikes; markets price one more ECB hike this year and 1–2 next year, while some economists view recent moves as possibly the last for now even as upside tightening risks rise. Fin

Euro‑area activity has surprised to the upside and July bank lending accelerated, implying previous ECB hikes have not yet materially slowed the economy and leaving scope for further tightening. Senior economist Martin Wolburg says Lagarde is expected to adopt a ‘hawkish wait’ stance, keeping the door open to additional hikes; markets price one more ECB hike this year and 1–2 next year, while some economists view recent moves as possibly the last for now even as upside tightening risks rise. Financing conditions have tightened: euro‑area long-term sovereign yields are at levels not seen since the GFC, driven by inflation and sovereign debt concerns, large tech bond issuance and German political volatility — a development that limits the ECB’s room for further rate increases.