The ECB Podcast President Lagarde presents the latest monetary policy decisions – 18 December 2025
Dec 18, 2025
President Lagarde unveils the latest decisions on interest rates, keeping them unchanged amid resilient economic performance. She highlights strong growth in sectors like chemicals and ICT, driven by robust labor markets and rising real incomes. Inflation remains a key focus, with projections extending to 2028. Lagarde also assesses various risks from geopolitical tensions to fiscal boosts affecting the outlook. Dive into the dynamics of financial and monetary conditions shaping the economy today.
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Rates Held While Data Guides Next Steps
- The Governing Council kept the three key ECB interest rates unchanged and stressed data-dependent policy decisions.
- They emphasised determination to stabilise inflation at the 2% target in the medium term.
Projections Show Gradual Return To 2%
- Staff project headline inflation averaging 2.1% in 2025 then near 2% by 2028 with services inflation slowing only gradually.
- Inflation excluding energy is seen stabilising around 2% in the final projection years and longer-term expectations remain near 2%.
Domestic Demand Driving Resilience
- The euro-area economy has been resilient with 0.3% growth in Q3 driven by consumption and investment.
- Domestic demand, rising real incomes and public investment are expected to underpin stronger growth ahead.