The ECB Podcast
President Lagarde presents the latest monetary policy decisions – 14 December 2023
Dec 14, 2023
President Lagarde presents the latest monetary policy decisions and discusses factors influencing interest rate decisions, plans to normalize the balance sheet, and expectations for inflation reaching the target of 2% in 2025. The episode also covers the Euro-area economy, labor market impact, changes in financial and monetary conditions, and concerns about financial stability.
17:21
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Quick takeaways
- The ECB has decided to keep the key interest rates unchanged and expects inflation to gradually decline before reaching the target of 2% in 2025.
- Risks to economic growth include monetary policy effects, weak global trade, and geopolitical tensions, while financial stability remains fragile due to tightening financing conditions and weak growth.
Deep dives
ECB interest rates unchanged, inflation projections
The governing council of the ECB has decided to keep the three key ECB interest rates unchanged. Inflation is expected to decline gradually over the course of next year before approaching the 2% target in 2025. Average headline inflation is projected to be 5.4% in 2023, 2.7% in 2024, 2.1% in 2025, and 1.9% in 2026. Underlying inflation has eased, but domestic price pressures remain elevated. Inflation excluding energy and food is projected to average 5% in 2023, 2.7% in 2024, 2.3% in 2025, and 2.1% in 2026.
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