European Central Bank President Christine Lagarde said inflation in the eurozone has not yet fully stabilized and may worsen in the near term. According to her, the ECB’s latest projections show inflation continuing to rise through the end of 2026 before moving into a declining phase.
Lagarde said the situation would first deteriorate and then improve. Recent data already point in that direction. In August, inflation in the eurozone accelerated to 3.3%.
The regulator responded by raising its three key interest rates by 25 percentage points. They now stand at 2.65%, 2.5% and 2.9%, respectively.
The ECB also said the conflict in the Middle East continues to generate inflationary pressure and remains a factor affecting price dynamics in the eurozone.
