European Central Bank President Christine Lagarde said a rate cut in July now looks likely, following stronger-than-expected growth across the eurozone in the second quarter. Her comments signal that policymakers are weighing easier borrowing conditions even as parts of the bloc show resilience.

The latest GDP figures gave the ECB room to consider a shift in policy after months of tightening aimed at curbing inflation. A move to cut rates would mark a new phase for the central bank as it tries to balance cooling price pressures with the need to support activity across the currency union.

At the same time, EU finance ministers discussed loosening fiscal rules to give governments more flexibility in backing economic recovery. The talks reflect broader concern that Europe must protect growth without reversing progress on budget discipline.

Markets will now watch closely for the ECB’s next meeting, where officials are expected to assess whether the stronger growth data is enough to justify lower rates in July.

Eu fiscal rules

Lagarde signals ECB rate cut in July after Eurozone growth beats forecasts