European Central Bank President Christine Lagarde said it would take "significant changes" to deter policymakers from raising interest rates again in December, and confirmed she will step down on Feb. 7, 2027, eight months before her term ends.
The comments, published Saturday in the Japanese newspaper Yomiuri Shimbun, come as inflation across the 21-member eurozone runs at double the ECB's 2 percent target . Headline inflation reached 4 percent in October, with energy inflation surging to 20.8 percent because of the Middle East conflict. Core inflation held steady at 2.5 percent, while services inflation edged up to 3.3 percent.
"We know that inflation numbers will remain high in the quarters to come," Lagarde said . "The higher they are, and the longer they remain high, the greater the risk to our medium-term target."
The ECB held its benchmark deposit rate at 2.50 percent in late October, but hawks on the Governing Council have pushed for renewed tightening . A 25-basis-point hike in December would mark the third increase of the current cycle and push borrowing costs to the upper bound of the neutral range, beyond which rates actively restrict growth. Lagarde said policymakers will examine multi-year wage agreements and companies' wage expectations before deciding, adding that they see no evidence of second-round effects beyond their projections.
Lagarde announced her resignation on Wednesday, citing a desire to regain her "freedom of expression." Critics have reproached her for putting personal interests ahead of institutional responsibility . At a recent press conference she told journalists, "There is never a good time to go," before ending with "Et voilà" .
She said she will not retire and remains ambitious, noting she has been seen in every kind of job except that of the Pope . The departure comes as the spread between French and German bonds sits at its highest level since 2011.
