christine lagarde : ecb press conference - introductory statement introductory statement by ms christine lagarde, president of the european central bank, and mr luis de guindos, vice - president of the european central bank, frankfurt am main, 12 december 2024. * * * good afternoon, the vice - president and i welcome you to our press conference. the governing council today decided to lower the three key ecb interest rates by 25 basis points. in particular, the decision to lower the deposit facility rate – the rate through which we steer the monetary policy stance – is based on our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. the disinflation process is well on track. staff see headline inflation averaging 2. 4 per cent in 2024, 2. 1 per cent in 2025, 1. 9 per cent in 2026 and 2. 1 per cent in 2027 when the expanded eu emissions trading system becomes operational. for inflation excluding energy and food, staff project an average of 2. 9 per cent in 2024, 2. 3 per cent in 2025 and 1. 9 per cent in both 2026 and 2027. most measures of underlying inflation suggest that inflation will settle at around our two per cent medium - term target on a sustained basis. domestic inflation has edged down but remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay. financing conditions are easing, as our recent interest rate cuts gradually make new borrowing less expensive for firms and households. but they continue to be tight because our monetary policy remains restrictive and past interest rate hikes are still transmitting to the outstanding stock of credit. staff now expect a slower economic recovery than in the september projections. although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter. staff see the economy growing by 0. 7 per cent in 2024, 1. 1 per cent in 2025, 1. 4 per cent in 2026 and 1. 3 per cent in 2027. the projected recovery rests mainly on rising real incomes – which should allow households to consume more – and firms increasing investment. over time, the gradually fading effects of restrictive monetary policy should support a pick - up in domestic demand. we are determined to ensure that inflation stabilises sustainably at our two per cent medium - term target. we will follow a data - dependent and

on our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. we are determined to ensure that inflation stabilises sustainably at our two per cent medium - term target. we will follow a datadependent and meeting - by - meeting approach to determining the appropriate monetary policy stance. in particular, our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. we are not pre - committing to a particular rate path. in any case, we stand ready to adjust all of our instruments within our mandate to ensure that inflation stabilises sustainably at our medium - term target and to preserve the smooth functioning of monetary policy transmission. we are now ready to take your questions. 4 / 4 bis - central bankers'speeches