ECB’s Lagarde says is wary of a wage-price spiral – “following that very closely”

European Central Bank President Lagarde spoke in an interview with French media outlet Le Figaro published on Sunday.

In brief:

• “I hear some people say that the final rate hike will take place in September. There could be a further hike of the policy rate or perhaps a pause.”
• “Inflation is undoubtedly falling”
• “The second quarter GDP figures for France, Germany and Spain are quite encouraging,”
• “They support our scenario of GDP growth of 0.9% in the euro area this year.”

Lagarde was asked about a wage-price spiral:

• “We are following that very closely, because that would have a huge impact on the services sector. If you look at inflation expectations and the wage increases negotiated collectively and individually, there is no sign of a wage-price spiral emerging.”

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