Lagarde stressed ECB’s readiness to take action amid high uncertainty

European Central Bank (ECB) President Christine Lagarde stated that the regulator is prepared to respond to increasing economic uncertainty tied to global market tensions. Speaking before European lawmakers in Brussels, she noted that inflation in the eurozone has stabilized near the 2% target but warned of heightened risks to economic growth.

She emphasized that current interest rates allow the ECB to respond effectively to economic developments. The central bank will continue monitoring inflation indicators and external factors, particularly energy market fluctuations. Decisions will be made on a meeting-by-meeting basis, maintaining maximum flexibility.

Despite the eurozone's unexpected 0.6% GDP growth in early 2025, subsequent data revealed weakening private sector activity. Experts attribute this slowdown to trade uncertainties and rising electricity prices. While the ECB's deposit rate is expected to hold steady at 2% for now, economists anticipate possible modest cuts by year-end.