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Lagarde warns inflation outlook worsens as ECB stays on its middle path

Lagarde said inflation is expected to run higher than previously forecast in 2027 and 2028.

Reported · Written up by our desk · Central Banks

ECB President Christine Lagarde said the euro zone economy is still expanding broadly across countries and sectors, with manufacturing and the labor market holding up, according to FXStreet.

She warned that inflation will be higher than previously expected in 2027 and 2028, while saying there is not yet evidence that price pressures are becoming embedded and that a measured policy response remains appropriate.

Lagarde said the ECB is sticking to the “middle path” for monetary policy, noting that growth has been broad-based and that the pattern is expected to have continued in the third quarter.

She added that the outlook remains surrounded by high uncertainty, while stating there are no signs yet that inflation is becoming embedded.

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