European Central Bank President Christine Lagarde says inflation is close to target and expects resistance to economic growth to fade quickly

European Central Bank President Christine Lagarde said the bank was close to its inflation target and expected economic growth to pick up in 2026.
"Inflation remains close to our 2% target," Lagarde said on Monday, adding that underlying price pressures were also evolving as planned and "wage growth will slow further."
Speaking to EU lawmakers in Strasbourg, she said that "weak export performance, driven by higher tariffs, a stronger euro and intensified global competition, is expected to drag on growth for the rest of the year."
"However, the impact of these headwinds on growth should fade next year," she said. "Survey indicators show that the service industry continues to grow, indicating that there is a certain inherent positive momentum in the economy."
With inflation hovering near the 2% target, two-way risks considered quite manageable, and the economy so far shown resilience to shocks from trade to war, most policymakers, including Lagarde herself, have hinted that they are reluctant to further reduce borrowing costs based on the current deposit rate of 2%.
Lagarde reiterated the ECB's official position: officials will make decisions based on incoming data and will not commit in advance to any future measures.
Deputy President Luis de Guindos and Chief Economist Philip Lane said earlier on Monday that there was no need for further rate cuts at this time. However, the latter described possible options for policymakers as between sitting still and continuing to relax.
When talking about the euro, Lagarde once again stressed that there is an opportunity to enhance the euro's global status at a time of geopolitical changes and rising policy uncertainty.
"In this changing landscape, we have a unique opportunity to create conditions to strengthen the euro's role on the global stage," she said, adding that this "will bring tangible benefits."