ECB's Lagarde Says Q2 Growth Showed Resilience, Rate Hike Holds Up Under Three Scenarios

European Central Bank President Christine Lagarde said second-quarter economic growth showed resilience despite the adverse impact of the energy shock. According to Sina Finance, she said at a Thursday news conference in Berlin that growth was broad-based across countries and sectors and may have continued into the third quarter. Lagarde said the outlook for economic growth has improved recently, while employment growth continues to slow. She said growth faces downside risks, especially because of the conflict in the Middle East and Russia's war against Ukraine, and that inflation will remain well above target until the first half of 2027. She also said the inflation outlook faces upside risks and that an energy shock could intensify further, with its effects on other prices and wages potentially stronger than currently expected. Lagarde said the meeting focused on the latest policy decision and did not discuss the future policy path. She said the rate hike decision was unanimous and that she had nothing to announce about her future. Lagarde added that the ECB's 25-basis-point rate hike held up under mild, adverse, and severe scenarios, with energy prices the main shock source under review.