ECB Hints at Possible Rate Cut in October as Inflation Cools

The European Central Bank (ECB) is showing increased optimism about inflation trends, with President Christine Lagarde suggesting a potential rate cut in October. Speaking to the EU Parliament, Lagarde expressed growing confidence that inflation could soon reach the target level.

Recent data from France, Spain, and Germany show inflation rates dropping below 2%, reinforcing the ECB's positive outlook. However, Lagarde cautioned that inflation might tick up towards year-end due to energy price effects.

The ECB's current key interest rate stands at 3.50% after a recent 0.25 percentage point reduction. Further decisions will be data-dependent, with the next policy meeting scheduled for October.

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