ECB leaves rates unchanged and president Christine Lagarde will 'stay on the ship'

European Central Bank President Christine Lagarde insisted on Thursday that she would still be in her role next year, saying "the captain stays on the ship" while there were clouds on the horizon. Picture: AP Photo/Michael Probst

European Central Bank President Christine Lagarde insisted on Thursday that she would still be in her role next year, saying "the captain stays on the ship" while there were clouds on the horizon.

However, asked to commit to completing her term, which is due to end in October 2027, Lagarde said she didn't like to be "boxed in".

"I did mention once: when there are clouds on the horizon, the captain stays on the ship, and this captain is staying on this ship," Lagarde told a press conference after the ECB had left its benchmark interest rates at 2.25%."You are not going to see the back of me before 2027."

Earlier this month Lagarde had said it was still possible she could leave ​before her term ends to weigh ‌in on French politics, but that running in next spring's French presidential election was not "currently" on the agenda.

The European Central Bank kept interest rates unchanged as expected but held the door open to another increase in September, as a fresh jump in energy prices threatens to keep inflation well above its 2% target.

The ECB had raised rates in June and hinted at more to come but a string of benign data on prices, wages, economic activity and inflation expectations in the weeks since made a quick follow-up step less urgent.

A return of oil prices to almost $100 per barrel on the resumption of fighting between the United States and Iran is keeping pressure on the ECB, however, and financial investors and market economists expect a move at the bank's next meeting to stop the energy shock setting off a broader price spiral.

Natural gas prices, which had stayed relatively lower in recent months, are now also at their highest level in more than three years, adding to price pressures.

"It is becoming more expensive for firms to source inputs, and they therefore expect to put up their selling prices," Ms Lagarde said.

Reuters