Lagarde says ECB holds rates, sees eurozone economy proving resilient

The European Central Bank left all three of its key interest rates unchanged, ECB President Christine Lagarde said at a press conference in Frankfurt following a meeting of the Governing Council, according to Report"s European bureau.

Lagarde said the current assessment confirms that eurozone inflation is set to stabilize around the ECB"s 2% target over the medium term. Updated ECB projections see inflation averaging 2.1% in 2025, 1.9% in 2026 and 1.8% in 2027, before returning to 2% in 2028.

Economic growth has exceeded expectations and is expected to be supported by domestic demand, investment and a resilient labor market. Growth is forecast at 1.4% in 2025, 1.2% in 2026, and 1.4% in both 2027 and 2028.

Lagarde stressed that the ECB will continue to follow a data-dependent approach and will not pre-commit to a specific path for interest rates. She said the central bank is "in a good position," but may take various actions amid high uncertainty linked to geopolitics, trade and wage dynamics.

She also noted an increase in investment, including in areas related to the adoption of artificial intelligence, and reaffirmed that the ECB stands ready to adjust all its tools as necessary to ensure price stability.