Key facts
- Lagarde said the ECB is watching indicators to determine whether a hike is necessary in December.
- The ECB left its key deposit rate at 2.5% at its November meeting, the week before November 5, 2026.
- Lagarde said energy costs are "bringing growth down and prices up" and called the situation "very hard."
- Lagarde said she will step down on February 7, 2027, before the formal end of her mandate.
European Central Bank President Christine Lagarde said on November 5, 2026 that the ECB is watching economic indicators to judge whether an interest rate hike is warranted in December, after the bank held rates steady at its November meeting.
The ECB left its key deposit rate at 2.5% the previous week. Lagarde, speaking at a financial literacy conference in Milan organized by Italy's Osservatorio, said a series of data releases before December would inform the decision. She said she will step down on February 7, 2027, months before the formal end of her mandate.
Lagarde told students the current situation was "very hard," with energy costs that are "bringing growth down and prices up." She said artificial intelligence development was supporting investment demand and making the euro zone economy more resilient.
She said separating supply-driven from demand-driven shocks is difficult and requires care so the rate tool is not applied "like a hammer," while adding that tools must still be used to keep inflation expectations from running away and to prevent second-round effects.