on - quarter growth rates of 0. 3 % and 0. 2 %, respectively ). in their latest projections, ecb staff are forecasting modest economic growth of 0. 8 % in fullyear 2024, rising slightly to 1. 3 % next year. the outlook is uncertain, particularly given what remains a tense geopolitical environment. neither in ukraine nor in the middle east has the situation eased. the outcome of the presidential election in the united states is another source of economic uncertainty. last week's tv debate gave us a taste of what is to come. europe might end up losing out if, say, the united states adopts a more protectionist trade policy, takes government action to support the country as a business location, or turns its back on multilateral cooperation ( on issues such as climate action, nato and the wto ). 2 / 7 bis - central bankers'speeches there's good news as well, though : the labour market in the euro area is as robust as ever, as unemployment hit an all - time low of 6. 4 % in july. germany's economy hasn't recovered yet, so its labour market hasn't improved, but nor did it deteriorate significantly. because firms in germany have largely refrained from scaling back their workforces during the ongoing spell of economic weakness, they see little need overall for new hires. even if they are certainly finding it difficult to fill vacancies in some areas. an analysis by the ecb has found that labour hoarding – that is, keeping staff in reserve – is still above pre - pandemic levels in the euro area. because profit margins were high at times, firms were able to hoard staff to a greater extent or for longer than usual when the situation or outlook deteriorated, the ecb noted. 2 if profit margins now start to normalise, they will probably reduce the scope for firms to undertake labour hoarding. in addition, labour hoarding suggests that there will be fewer hires than usual as the economy recovers. instead, productivity is more likely to rise. the new projections include an increase in euro area labour productivity of around 1 % in both 2025 and 2026, following stagnation in the current year and a decline of just under 1 % last year. taken in isolation, this would dampen unit labour costs and thus inflation. 3 inflation this brings us to question number two concerning the outlook for prices. on this point, the focus

to deliver our mission through these changes and that will require a shift in our focus, our analysis and our frameworks. open and engaged – the rapid pace of change and the expectations of our stakeholders means that we need to be well - connected with them. it will require us to explain what we are doing and what we are not doing. it will also require us to listen to individuals and businesses ( and not only regulated firms ) across the country so that we can understand the issues they are facing and help them to understand the actions we are taking in response. transforming – in a rapidly changing world, we have to transform the way that we operate if we are to succeed. we will need to invest in new skills and capabilities, becoming more agile, and looking for continuous improvement in the way we work to meet the challenges of an evolving financial system. our ability to turn data into information and to provide our people with the tools to use it effectively will be an important platform for our transformation. safeguarding – we will remain steadfast to maintain price stability and the stability of the financial system overall, as well as the effective regulation of financial services and markets, while ensuring that the best interests of consumers of financial services are protected. conclusion against the backdrop of key issues facing all financial service providers – continued risks and uncertainty relating to the pandemic, the pace of technological change, climate change – and the particular commercial challenges facing credit unions, there are significant opportunities and challenges for credit unions individually and collectively. the sector needs to embrace change. credit unions need to form and realise a clear vision of their role and ensure that they implement the necessary business model and technological changes to realise their vision and fulfil this role. as i noted earlier, this will require credit unions to build : the necessary capability to meet changing customers ’ needs and to take advantage of the opportunities technology offers in providing their services ; the resilience and security necessary to underpin the increased reliance on technology ; and sufficient board and senior management understanding and oversight of the use of technology and customer data. available capacity and flexibility within the tailored regulatory framework for credit unions provides 6 / 7 bis central bankers'speeches scope for credit unions to expand and develop existing and new service offerings. additionally, the significant level of restructuring the sector has undergone should mean it is better positioned to take advantage of development opportunities – with larger credit unions leading the way for smaller credit unions. addressing the challenges and availing of the opportunities will require effective collaboration and the