ECB President Lagarde said higher labor productivity helps restrain growth in unit labor costs.

The ECB raised the deposit rate 25bps to 2.50% on Thursday — its second hike since the Iran war broke out in February — saying inflation will remain well above the 2% target for an extended period. The move was in line with expectations of almost all economists surveyed. The bank reiterated it will not pre-commit to further action and will decide on a meeting-by-meeting basis. ECB said the Middle East conflict continues to add inflationary pressure; the outlook is highly uncertain, with upside risks to inflation and downside risks to growth. Thursday’s step leaves euro-area policymakers further ahead of peers in responding to an energy-price surge that has produced the fastest inflation in nearly three years. Traders expect two more ECB hikes by mid-2027. By contrast, the Fed and the Bank of England have not tightened in response to the Middle East hostilities and may remain on hold next week.

CHINA will travel to New Delhi on Sept 12-13 to attend the 18th BRICS leaders' meeting at the invitation of Indian Prime Minister Modi, the foreign ministry spokesman said.