ECB’s Lagarde: Inflation Seen Stabilizing at 2% in Medium Term

By Marta Vilar – MADRID (Econostream) – European Central Bank President Christine Lagarde said on Thursday that the ECB continued to expect inflation to settle at 2% over the medium term.

In a speech at the Committee on Economic and Monetary Affairs at the European Parliament in Brussels, Lagarde said the ECB’s measures to curb inflation had proven “effective.”

Economic growth in 2025 had exceeded expectations at the start of the year, she said, with activity supported by rising wages in a resilient labor market as well as investment in defense, infrastructure and technology.

However, she cautioned that the external backdrop remained difficult, citing higher tariffs, a stronger euro and ongoing global policy uncertainty.

Lagarde attributed January’s 1.7% inflation reading to lower energy prices and easing services inflation. While wage growth remained “elevated,” she said it had been gradually slowing and was projected to moderate to around 3% over the medium term.

“We continue to expect inflation to stabilize at our 2% target in the medium term,” she said. “We therefore decided to keep the three key ECB interest rates unchanged at our monetary policy meeting earlier this month.”

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