Lagarde: Today's decision not a "forceful" one

LAGARDE: DECISION WAS UNANIMOUS ECB's President Lagarde: There will be no pre-set rate path ECB's Lagarde: Discussion was not at all about insurance hike ECB's President Lagarde: Indirect cost of Iran war also showing up. ECB's Lagarde: If we were not taking this very obvious monetary policy decision, we'd be north of our target at the end of the projection horizon

Good afternoon, the Vice-President and I welcome you to our press conference. The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at our two per cent target in the medium term. In line with this commitment, we today decided to raise the three key ECB interest rates by 25 basis points. The war in the Middle East is generating inflation pressures, and the decision to raise rates is robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area. In the baseline of the new Eurosystem staff projections, headline inflation is expected to average 3.0 per cent in 2026, 2.3 per cent in 2027 and 2.0 per cent in 2028. For inflation excluding energy and food, the baseline foresees an average of 2.5 per cent in 2026 and 2027 and 2.2 per cent in 2028. Compared with March, staff have revised up their baseline projection for inflation in 2026 and 2027 owing to a higher path for energy prices, which, to some extent, is expected to feed into food, goods and services inflation. The baseline sees economic growth at an average of 0.8 per cent in 2026, 1.2 per cent in 2027 and 1.5 per cent in 2028. This is a downward revision for 2026 and 2027, reflecting a more pronounced impact of the war on commodity markets, real incomes and confidence. The outlook remains unce ECB's President Lagarde: Risks to inflation outlook are to the upside. LAGARDE: FINANCIAL CONDITIONS TIGHTER THAN BEFORE WAR ECB's Pres Lagarde: Wage Trackers Continue to indicate easing labour costs In 2026 - Some Indicators Of Underlying Inflation Have Already Been Driven Higher By Energy Shock - Most Measures Of Longer-Term Expectations Stand At Around 2%

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