The European Central Bank (ECB) has left interest rates unchanged following its Governing Council meeting today.
ECB Chief Christine Lagarde warned that inflationary pressures remain elevated, with energy prices continuing to rise. Although underlying inflation indicators have remained broadly stable, the central bank cautioned that the magnitude and duration of the energy shock could drive inflation higher while weighing on economic growth. Inflation risks remain tilted to the upside.
Eurozone inflation rose to 3.8% in September, up from 3.2% in August, bringing it significantly above the ECB’s 2% medium-term target. Energy inflation increased sharply, while services and food prices also recorded increases.
The decision to maintain interest rates comes amid tighter financial conditions and growing uncertainty over the European economic outlook. President Lagarde stressed that future decisions would remain dependent on incoming economic data, with no predetermined path for interest rates.
The monetary policy statement was overshadowed by the announcement that ECB President Christine Lagarde will leave her post on 7 February 2027, eight months before the end of her term.
Speaking about her departure, Lagarde said she wanted greater freedom to engage in public debate beyond monetary policy and that she could no longer remain neutral especially while noting rising misinformation.
“I’m interested in the truth, and I see the truth being very often damaged, contradicted by misrepresentation,” President Lagarde said, explaining her decision to leave early.
She also reiterated the need for European legislators to accelerate the completion of the continent’s financial integration agenda with the completion of the savings and investments union, and advancing the legislative framework for the digital Euro.
You can find the press conference here. Statement here.
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