Monetary policy statement (with Q&A)
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Lagarde explains the decision to keep rates on hold, taken unanimously after a debate on a hike, against a backdrop of rising inflation from the energy shock. She warns that, barring significant developments in the data, the direction of travel is clear ahead of December, and confirms she will step down after the February meeting.
Key points
- Inflation rose to 3.8% in September, with energy at 18.9%; underlying inflation remains stable
- The Governing Council debated a hike but chose to wait for the new December projections
- Upside risks to inflation and downside risks to growth from the Middle East and the war in Ukraine
- Financing conditions have tightened; unemployment at 6.4%
Who is affected
Euro area markets, banks, households and firms
Deadlines
Next monetary policy meeting in December, with new projections
Plain-language version
The ECB, the euro area's central bank that sets interest rates, left them unchanged, although it discussed a hike. Inflation rose to 3.8% in September because of energy, and Lagarde warns that unless the data change significantly, the direction for December is clear. What it decides will affect variable-rate mortgages and loans. Lagarde will leave after the February meeting.
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