Christine Lagarde

The decision was guided by fresh projections showing inflation averaging 3% this year

It is expected to raise interest rates from 2.25% to 2.5%

Her eight-year term at the ECB ends in October 2027

Leadership change at the European Central Bank must be well-planned to minimise market risk

She turned down suggestions that she would run for presidency

Lagarde has previously played down resignation rumours, saying a ship’s captain would not leave during turbulent times

Better banking and fiscal regulations as well as investments in low-carbon energy have paid off recently, she notes

Inflation set to return to target over the medium term

Headline inflation in Europe has already jumped past the 2 per cent target