ECB Weighs December Rate Hike Amid 4% Inflation

European Central Bank President Christine Lagarde said policymakers will assess a wide range of economic data before deciding whether to raise interest rates at their December meeting, after keeping the deposit rate at 2.5%. Eurozone inflation reached 4% in October, its highest level in three years, with energy and food costs driving the increase and adding to expectations of tighter policy. However, core inflation remained at 2.5%, suggesting energy price increases have so far had limited spillover into broader prices. Lagarde described the outlook as difficult, saying energy costs are lifting inflation while weighing on growth, and stressed the need to prevent inflation expectations from rising without responding bluntly to supply shocks. Several policymakers have signaled support for a December increase, but the decision will depend on incoming data and updated economic projections.