European Central Bank Signals Potential Rate Hike for December

European Central Bank (ECB) President Christine Lagarde has announced that a new interest rate hike could be on the agenda for December due to rising inflation and energy costs in the Eurozone.

Speaking at a press conference held in Frankfurt, Lagarde recalled that the ECB Governing Council decided to keep the three key policy rates unchanged at its October meeting. The bank reached this decision unanimously, taking into account tightening financing conditions.

Lagarde emphasized that the rapid increase in energy prices since September and rising financing costs have increased economic risks. Stating that current economic conditions could actually justify a rate hike, Lagarde noted that the council discussed this option but preferred to wait at this stage.

Although data supports that the Eurozone economy continued to grow in the third quarter of the year, downside risks to the growth outlook remain. It was stated that the steps to be taken in December will be shaped in line with the economic data to be released over the next six weeks.