ECB's Lagarde says is wary of a wage-price spiral – "following that very closely"

<p>European Central Bank President Lagarde spoke in an interview with French media outlet Le Figaro published on Sunday.</p><p>In brief:</p><ul><li>"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."</li><li>"Inflation is undoubtedly falling"</li><li>"The second quarter GDP figures for France, Germany and Spain are quite encouraging," </li><li>"They support our scenario of GDP growth of 0.9% in the euro area this year."</li></ul><p>Lagarde was asked about a wage-price spiral:</p><ul><li>"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."</li></ul><p><a href="https://www.ecb.europa.eu/press/inter/date/2023/html/ecb.in230730~0503905cab.en.html" target="_blank" rel="nofollow">Full text is here</a> for more. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.