Christine Lagarde defended the ECB’s tightening policy before the IMF, having raised rates twice since June to bring the deposit rate to 2.50% on September 16. Eurozone inflation reached 3.8% in September, driven by energy, with the core index rising to 2.5%. The ECB refuses to look through this energy shock but promises a measured response given the absence of wage spillover signs. Lagarde also set European legislators a deadline of end-2026 to adopt the digital euro regulation, a prerequisite for the twelve-month internal pilot planned for the second half of 2027. Financial stability remains threatened by private credit and artificial intelligence, whose cyber risks and provider concentration are deemed concerning.
Source: Read the original article
