Overview

• The ECB kept the deposit rate at 2.0% for a second meeting and said inflation is around its 2% objective with prospects broadly unchanged.
• New staff projections put growth at 1.2% in 2025 and 1.0% in 2026, and inflation at 2.1% in 2025 and 1.7% in 2026, with 2025 growth revised up from June and 2026 trimmed.
• Christine Lagarde said the disinflation phase has ended and reiterated that policy will be set meeting by meeting without a preset path.
• In France, newly appointed prime minister Sébastien Lecornu must form a government and propose a budget under censure risk as 10‑year yields briefly topped Italy’s and a Fitch review looms.
• Analysts see limited contagion across the euro area; the euro ticked up to about $1.17 and the ECB’s Transmission Protection Instrument remains available but unused as Germany’s weakness and new US‑EU tariffs pose headwinds.