European Central Bank President Christine Lagarde said a rate cut in July is still possible after new figures showed the eurozone economy expanding by just 0.1% in the second quarter. The weaker reading added to concerns that the region is losing momentum as inflation and borrowing costs continue to weigh on activity.

Lagarde’s remarks signaled that policymakers are not closing the door on easing monetary policy, even as they continue to assess incoming data. The ECB has been navigating a delicate balance between bringing inflation under control and avoiding a deeper hit to growth across the 20-member currency bloc.

The modest expansion underscores how fragile the recovery remains in parts of the eurozone, where households and businesses are still feeling pressure from higher interest rates. Any move in July would depend on whether upcoming economic and price data support a shift toward looser policy.

Markets will now watch for further ECB guidance and fresh inflation figures to gauge how quickly the central bank may act. For now, Lagarde’s comments keep the prospect of a July cut firmly in play.