{"id":185368,"date":"2025-12-10T19:51:08","date_gmt":"2025-12-10T19:51:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/185368\/"},"modified":"2025-12-10T19:51:08","modified_gmt":"2025-12-10T19:51:08","slug":"christine-lagarde-says-ecb-will-probably-lift-growth-forecasts","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/185368\/","title":{"rendered":"Christine Lagarde says ECB will probably lift growth forecasts"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

European Central Bank president Christine Lagarde has said that rate-setters will probably lift their growth forecasts for the Eurozone when they meet next week, in the latest sign of the economy\u2019s resilience. <\/p>\n

Pointing to the ECB<\/a>\u2019s previous upgrade to the economy\u2019s outlook in September, Lagarde told the Financial Times in an interview that \u201cmy suspicion is we might do that again in December\u201d.<\/p>\n

In September, the ECB raised its forecast for Eurozone GDP for 2025 to 1.2 per cent, from a prediction of 0.9 per cent in June. It was the first upward revision to growth projections since March 2024.<\/p>\n

Speaking to the FT\u2019s Global Boardroom conference<\/a> on Wednesday, Lagarde said: \u201cThe Eurozone area is resisting better than what we had anticipated back in April. <\/p>\n

\u201cWhen the tariffs hit, when uncertainty grew, when war was raging, everyone thought that growth in the euro area would fall very badly, and this hasn\u2019t been the case.\u201d<\/p>\n

Lagarde declined to give further details on the growth forecasts that the ECB will release on December 18, when the central bank is expected to hold its benchmark interest rate at 2 per cent. <\/p>\n

The Eurozone economy<\/a> has fared better than expected in the face of US President Donald Trump\u2019s trade war. It grew 0.2 per cent in the third quarter, surpassing economists\u2019 forecasts, helped by increased investment in digital services.<\/p>\n

In recent days, investors and traders have ratcheted up bets on rate rises from the ECB and other major central banks next year, pointing to a mix of persistent inflation and resilient economic growth. <\/p>\n

Traders now ascribe a roughly 40 per cent chance to the ECB lifting interest rates by a quarter point by the end of next year, according to levels implied by swaps markets.<\/p>\n

Dominic Bunning, head of G10 currency strategy at Nomura, said Lagarde\u2019s remarks added to a \u201cvery clear shift in tone in the past few weeks from a range of [ECB] policymakers\u201d.<\/p>\n

The ECB will also release new inflation forecasts next week. Inflation in the Eurozone rose to 2.2 per cent in November, exceeding the central bank\u2019s 2 per cent target for the third month in a row. <\/p>\n

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Lagarde said: \u201cThe whole economy is faring better. Is it as good as it should be? We are, I think, quite close to potential, but there\u2019s a lot to be done in terms of improving the situation and\u00a0improving the productivity of the euro area.\u201d<\/p>\n

However, she pushed back against French President Emmanuel Macron<\/a>\u2019s recent suggestion to rethink the priorities of the ECB to boost the single market. <\/p>\n

The ECB president said that, while it might be \u201cinteresting\u201d to consider a potential change in the EU treaty that defines the central bank\u2019s role, its current mandate to keep inflation in check was \u201cpretty clear\u201d. <\/p>\n

She also stressed that even very low interest rates or quantitative easing would not \u201cchange the barriers\u201d to growth in Europe, adding that central banks around the world were often used as \u201cscapegoats\u201d by politicians.<\/p>\n

Macron was quoted in a recent interview with the French newspaper Les Echos as saying: \u201cReasserting the value of the European interior market, that entails not only having inflation as our sole objective but also economic growth and employment.\u201d<\/p>\n

Lagarde suggested issuing joint Euro area debt to fund wider defence expenditure, which would become necessary over the coming years. The EU issued joint debt during the Covid-19 pandemic and today\u2019s situation was \u201cequally a matter of survival and urgency\u201d, Lagarde said, adding that this was her \u201cpersonal view\u201d.<\/p>\n

Additional reporting by Emily Herbert and Ian Smith in London and Sarah White in Paris<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":185369,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-185368","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/185368","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=185368"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/185368\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/185369"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=185368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=185368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=185368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}