Lagarde: ECB's October Decision Will Reflect Greater Confidence on Inflation

ECB President Christine Lagarde. (EPA)
ECB President Christine Lagarde. (EPA)
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Lagarde: ECB's October Decision Will Reflect Greater Confidence on Inflation

ECB President Christine Lagarde. (EPA)
ECB President Christine Lagarde. (EPA)

The European Central Bank (ECB) is increasingly confident that inflation will fall back to its 2% target and this should be reflected in its October policy decision, ECB President Christine Lagarde said on Monday.

She said cross-border banking mergers in Europe were "desirable" to boost their competitiveness, just as Italy's UniCredit was looking to increase its stake and possibly take over Germany's Commerzbank.

The ECB cut interest rates from record highs in June, and cut again earlier this month, but Lagarde gave few hints at the time about the bank's next move, leaving markets guessing.

Lagarde's comments on Monday will bolster already abundant bets on a further cut in October given a rapid deterioration of the growth outlook and falling energy costs.

Inflation in the 20-nation currency bloc likely fell below the ECB's 2% target for the first time since mid-2021 this month, a raft of national data suggests.

This, along with poor growth indicators, has raised bets on a 25 basis point rate cut in October and markets now see a 75% chance of a move, up from 25% seen early last week.

Lagarde also acknowledged the recent run of poor growth readings.

“Looking ahead, the suppressed level of some survey indicators suggests that the recovery is facing headwinds,” she told a regular hearing of the Committee on Economic and Monetary Affairs.

Still, she repeated the bank's usual line that the recovery is expected to strengthen and rising real incomes should allow households to consume more.

She added that the labor market, the source of some price pressures via rapid wage growth, remains resilient, even if wage growth is moderating and corporate profits are absorbing some pay increases.

Meanwhile, Lagarde said cross border mergers among Europe's biggest banks are needed, just as Italy's UniCredit was looking to increase its stake and possibly take over Germany's Commerzbank.

“Cross borders mergers -- banks that can actually compete at a scale, at a depth and at range with other institutions around the world, including the American banks and the Chinese banks -- are in my opinion desirable,” she told a parliamentary hearing.

She added that her comments should not be taken as a direct intervention in any particular deal.



Saudi Inflation Rate Remains Stable at 2.3% in June 2025

The Wholesale Price Index (WPI) recorded a relative stability at 2.1% in June 2025
The Wholesale Price Index (WPI) recorded a relative stability at 2.1% in June 2025
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Saudi Inflation Rate Remains Stable at 2.3% in June 2025

The Wholesale Price Index (WPI) recorded a relative stability at 2.1% in June 2025
The Wholesale Price Index (WPI) recorded a relative stability at 2.1% in June 2025

The General Authority for Statistics (GASTAT) reported that the annual inflation rate in Saudi Arabia remained stable at 2.3% in June 2025 compared to the same month of the previous year.

The Consumer Price Index (CPI) also remained steady at 0.2% in June 2025 compared to May 2025, on a monthly basis.

Similarly, the Wholesale Price Index (WPI) recorded a relative stability at 2.1% in June 2025 compared to the same month last year. However, the WPI decreased by 0.1% in June 2025 compared to May 2025.

According to GASTAT, CPI reflects price changes paid by consumers for a fixed basket of 490 goods and services. This basket was selected based on the results of the 2018 Household Income and Expenditure Survey. Prices are collected through field visits to points of sale, and the CPI statistics are published monthly.