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10/27/2022, 2:55 PM (Source: TeleTrader)
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ECB's Lagarde: Activity likely slowed significantly in Q3

European Central Bank (ECB) President Christine Lagarde said on Thursday that the economic activity in the Eurozone is likely to show a significant slowdown in the third quarter, adding that "further weakening" should be expected in the rest of 2022 and the beginning of 2023.

"High inflation continues to dampen spending and production" and business and consumer confidence have fallen "rapidly," she told reporters in Frankfurt after the ECB decided to raise interest rates by 0.75 percentage points with the deposit rate reaching the highest level since 2009. Demand for services in the euro area is decelerating, global activity is growing more slowly and terms of trade are worsening, Lagarde pointed out.

On the other hand, the labor market performed well but the weakening of the economy "could lead to somewhat higher unemployment in the future," she warned, adding that fiscal measures regarding energy should be temporary and targeted to help those most vulnerable.

Baha Breaking News (BBN) / MS