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ECB’s Lagarde: Unanimous Agreement that All Options Should Remain on the Table

18 December 2025

ECB’s Lagarde: Unanimous Agreement that All Options Should Remain on the Table
Christine Lagarde, president of the European Central Bank, at the ECB press conference in Frankfurt on December 18, 2025. Photo by the ECB under CC BY-NC-ND 2.0.

By Marta Vilar – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday said that the Governing Council unanimously agreed to keep all policy options open, stressing that while the ECB remains “in a good place”, its stance should not be seen as frozen.

Speaking at the press conference following the ECB Governing Council meeting, Lagarde said today’s decision to leave interest rates unchanged was unanimous, as was the commitment to maintaining a meeting-by-meeting, data-dependent approach without any pre-commitment.

“We are in a good place, which does not mean that we are static,” Lagarde said.

Asked whether there had been any discussion of future rate cuts or hikes, Lagarde responded unequivocally: “No.”

Commenting on the stronger growth outlook in the ECB’s latest staff projections, Lagarde attributed the upgrade primarily to investment, which she said was “largely attributable to the development of AI”. She added that the ECB would assess in its February surveillance report whether this effect was likely to prove durable.

Lagarde also cited a positive surprise in exports as a contributor to the improved growth outlook, noting that recent developments appeared more sustainable than initially expected.

Asked about remarks by Executive Board member Isabel Schnabel suggesting the next policy move could be a rate hike, Lagarde said that while the growth outlook had improved, uncertainty had not eased and may even have intensified.

“What has not changed much at all, and if anything may have worsened, is uncertainty,” she said, adding that the Governing Council was not comfortable operating in such an environment and had therefore unanimously agreed to keep all options on the table.

Turning to inflation, Lagarde said the recent increase in services inflation was partly driven by wage developments, which had surprised to the upside. However, she said the ECB continued to expect wage growth to moderate in 2026, falling below 3% by the end of the year.

“We are attentive” to wages she said, noting that while much of the catch-up and one-off payments had already occurred, the ECB had been surprised by developments between September and December, which were reflected in the latest projections. “So, we are humble.”

Asked about potential successors and her past remarks about former De Nederlandsche Bank Governor Klaas Knot, Lagarde said she had no preferred candidate  and denied having actually endorsed Knot for the role of ECB president.

She added that there were “plenty of very good candidates”, noting that Schnabel - who had expressed interest in position – was among them, but that others could emerge over time.

On the legal feasibility of Schnabel becoming ECB president given her current role on the Executive Board, Lagarde said it would be for juries to determine, noting that similar situations in the past, including those involving Benoît Cœuré and Christian Noyer, had posed obstacles, though “the matter needs to be looked at again.”