The European Central Bank (ECB) left interest rates unchanged on Thursday, as widely expected, with President Christine Lagarde emphasizing a cautious, data-driven approach to future policy decisions.
Speaking after the Governing Council meeting, Lagarde said the ECB remains focused on price stability while ensuring financial stability across the euro area. She noted that eurozone sovereign bond markets are functioning smoothly with good liquidity, News.Az reports, citing Reuters.
“The disinflationary process is over,” Lagarde said, but stressed that the ECB is not on a predetermined path and will assess conditions meeting by meeting. The Governing Council’s decision to maintain all three key rates was unanimous.
Lagarde highlighted that economic risks are now more balanced. Trade agreements have reduced uncertainty, though renewed trade tensions, a stronger euro, or higher tariffs could weigh on growth. Conversely, higher infrastructure and defense spending, productivity-enhancing reforms, and improvements in business confidence could support growth.
She reiterated that the ECB is not pre-committing to a specific rate path and is ready to adjust all instruments as needed. The central bank expects current headwinds, including global competition and a stronger euro, to ease next year.
