The European Central Bank (ECB) kept its three key interest rates unchanged. Lagarde stated that rising energy prices pose an upside risk to inflation and that the ECB is not pre-committing to a specific interest rate path.

The European Central Bank (ECB) kept its three key interest rates unchanged, with Christine Lagarde stating that rising energy prices pose upside risks to inflation and that the ECB is not pre-committing to a specific interest rate path. The ECB's Governing Council decided today to maintain the three key interest rates. Lagarde stated that the sustained increase in energy prices poses an upside risk to the inflation outlook and a downside risk to the growth outlook. She noted that while the full impact of the energy shock is still unfolding, underlying inflation has remained broadly stable so far, and wages have not shown a substantial response at this stage. Lagarde emphasized that the ECB is committed to setting monetary policy to ensure inflation stabilizes at its 2% medium-term target and will adopt a data-dependent, meeting-by-meeting approach to determine the appropriate monetary policy stance, without pre-committing to a specific interest rate path. Eurozone inflation rose to 3.8% in September, with energy inflation surging to 18.9%.