The account of July’s ECB meeting revealed that Christine Lagarde’s messaging in the press conference was “deliberately uninformative about future interest rate decisions”. We set ourselves a slightly higher bar for this ECB preview. While the Bank looks set to leave interest rates unchanged for the rest of this year, we think cuts are more likely than hikes in 2026. We also think fiscal risks will push up bond spreads in France in the next year or two, and as long as any increase is gradual and does not go “too far”, the ECB will let it happen.
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