London Daily

Focus on the big picture.
Tuesday, Feb 10, 2026

ECB’s Lagarde tells governments to back off and keeps tightening

ECB’s Lagarde tells governments to back off and keeps tightening

The central bank chief warned governments against spending too heavily to shield their people from high energy prices.

European Central Bank chief Christine Lagarde rebuffed EU leaders’ criticism of her monetary policy approach on Thursday, delivering another big interest rate hike in a bid to fight red-hot inflation in the eurozone.

“We have to do what we have to do,” Lagarde said during her press conference after the ECB raised rates by a whopping 75 basis points to 1.5 percent, bringing it to the highest level since 2009. “A central bank has to focus on its mandate. Our mandate is price stability.”

In its fastest tightening cycle on record, the ECB has now raised rates by a total of 2 percent over its last three meetings — and more is to come, according to a statement following the policy meeting in Frankfurt.

The bank’s Governing Council “expects to raise interest rates further, to ensure the timely return of inflation to its 2 percent medium-term inflation target,” it said.

The comments from Lagarde, a former French finance minister, followed a series of critical remarks from EU leaders.

In the week up to the meeting, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni and Portuguese Finance Minister Fernando Medina all expressed worries over the speed at which the ECB is raising interest rates and the implications this may have on growth. Earlier in the month, similar criticism came from Finnish Prime Minister Sanna Marin.

“I’m concerned to see lots of experts and certain European monetary policymakers explaining to us that we need to break demand in Europe to better contain inflation,” Macron told Les Echos in an interview earlier this week. “One must be very careful.”

Lagarde, who has previously said the ECB may have to raise rates to a level where they hurt growth, said the bank was willing to raise rates beyond neutral levels, where interest rates neither boost growth in order to ensure price stability.

But she did not say at which pace and to which level interest rates will move.

Her broader comments, however, will cement market expectations of a slowdown in tightening ahead.

Not only did she drop the reference to rate hikes over the “next several meetings” from her statement, but she also noted that “the Governing Council has made substantial progress in withdrawing monetary policy accommodation.”


Warning to governments


In addition, she said that policymakers will consider the rising risk of a recession and its dampening impact on inflation as well as the fact that previous tightening moves will only work with a lag, meaning that the full impact of previous hikes has yet to play out.

This does not mean that tensions won’t flare up again between the ECB and eurozone capitals.

“ECB President Lagarde put more emphasis on recession risks at today’s press conference,” said Commerzbank economist Jörg Krämer. “But due to persistently high inflation data as well as de-anchored inflation expectations, another big rate hike in December remains on the table.”

Despite the recent measures to placate inflation in the Eurozone, tensions might flare up again between the ECB and EU capitals


Lagarde doubled down on her demands that governments ensure fiscal measures remain limited as otherwise even more aggressive ECB action will be in store. Germany and other governments are providing generous subsidies to shield their populations from major increases in energy prices.

“I must have repeated many, many times the famous triple-T, which is temporary, targeted and tailored,” she said. “Which, from our perspective, will help them address the needs of the most affected by income erosion and also by inflation, but without fueling inflation on a broad basis, because that would be utterly counterproductive in that it would require that we take harder monetary policy measures in order to deliver on our mandate.”

At the same time, governments should pursue fiscal policies that show they are committed to gradually bringing down high public debt ratios, Lagarde said. Recent market turmoil in the United Kingdom has shown what happens when fiscal policy goes on a collision course with a central bank fighting red-hot inflation.

ECB relations with fiscal authorities will no doubt remain a key focus in the coming months, not least because Lagarde signaled the Governing Council will agree on principles of reducing its massive government bond holdings at the December meeting that indebted member countries have relied on heavily.

Newsletter

Related Articles

0:00
0:00
Close
Beijing Brands UK Hong Kong Visa Expansion ‘Despicable and Reprehensible’ After Jimmy Lai Sentencing
Tesco Chief Warns UK Is ‘Sleepwalking’ Toward a Joblessness Crisis
Trump’s ‘Act of Great Stupidity’ Comment on UK Chagos Deal Reverberates Through Diplomacy and Strategy
New U.S. filings say Jeffrey Epstein repaid Les Wexner one hundred million dollars after theft allegation
Commerce Secretary Howard Lutnick acknowledges 2012 visit to Jeffrey Epstein’s private island as lawmakers scrutinise past ties
Helsing and Stark Defence loitering-munition drones and Germany’s race to industrialise battlefield autonomy
UK orders deletion of Courtsdesk court-data archive, reigniting the fight over who controls public justice records
UK Police Review Fresh Claims Involving Prince Andrew as Senior Royals Respond to Epstein Files
Keir Starmer’s Premiership Faces Unprecedented Strain as Epstein Fallout Deepens
Starmer Vows to Stay in Office as UK Government Faces Turmoil After Epstein Fallout
China and UK Signal Tentative Reset with Commitment to Steadier, Professionally Managed Relations
UK Confirms Imminent Increase in ETA Fee to £20 as Entry Rules Tighten
UK Signals Possible Seizure of Russia-Linked ‘Shadow Fleet’ Tanker in Escalation of Sanctions Enforcement
Epstein Scandal Piles Unprecedented Pressure on UK Prime Minister Keir Starmer’s Leadership
UK’s ‘Most Romantic Village’ Celebrates Valentine’s Day and Explores the Festival’s Rich History
The Implications of Expanding Voting Rights to Non-EU Foreign Residents in France
Ghislaine Maxwell to Testify Before US Congress on February 9
Al.com Acquired by Crypto.com Founder for $70 Million
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
US and Iran to Begin Nuclear Talks in Oman
Winklevoss-Led Gemini to Slash a Quarter of Jobs and Exit European and Australian Markets
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
NASA allows astronauts to take smartphones on upcoming missions to capture special moments.
Trump administration to launch TrumpRx.gov for direct drug purchases
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Epstein Case Documents Reignite Global Scrutiny of Political and Business Elites
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
UK Royal Family Faces Intensifying Strain as Epstein-Linked Revelations Rock the Institution
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
Tech Mega-Donors Power Trump-Aligned Fundraising Surge to $429 Million Ahead of 2026 Midterms
UK Pharma Watchdog Rules Sanofi Breached Industry Code With RSV Vaccine Claims Against Pfizer
Melania Documentary Opens Modestly in UK with Mixed Global Box Office Performance
Starmer Arrives in Shanghai to Promote British Trade and Investment
Harry Styles, Anthony Joshua and Premier League Stars Among UK’s Top Taxpayers
New Epstein Files Include Images of Former Prince Andrew Kneeling Over Unidentified Woman
Starmer Urges Former Prince Andrew to Testify Before US Congress About Epstein Ties
Starmer Extends Invitation to Japan’s Prime Minister After Strategic Tokyo Talks
Skupski and Harrison Clinch Australian Open Men’s Doubles Title in Melbourne
DOJ Unveils Millions of Epstein Files, Fueling Global Scrutiny of Elite Networks
France Begins Phasing Out Zoom and Microsoft Teams to Advance Digital Sovereignty
China Lifts Sanctions on British MPs and Peers After Starmer Xi Talks in Beijing
Trump Nominates Kevin Warsh as Fed Chair to Reorient U.S. Monetary Policy Toward Pro-Growth Interest Rates
AstraZeneca Announces £11bn China Investment After Scaling Back UK Expansion Plans
Starmer and Xi Forge Warming UK-China Ties in Beijing Amid Strategic Reset
×