European Central Bank President Christine Lagarde said euro-zone inflation will remain elevated in coming quarters, with the longer it stays high, the greater the risk to the ECB’s medium-term 2% target. In an interview with Japan’s Yomiuri Shimbun published Saturday, she said second-round effects, including wage pressures, remained within the central bank’s projections. Headline inflation reached 4% in October, twice the ECB’s objective, while core inflation held at 2.5% and services inflation rose to 3.3%. Energy inflation increased to 20.8% from 18.9% in September as crude oil and European natural-gas prices rose after the Middle East conflict and global refinery capacity declined. The ECB kept its benchmark deposit rate at 2.50% in late October, but Lagarde said policymakers would examine detailed inflation components before deciding whether to deliver a 25-basis-point increase in December, potentially the third hike of the current cycle. She said wage agreements and company wage expectations showed no evidence of an inflationary shift, while higher sovereign yields and borrowing costs were already restricting credit. A December increase would take rates to the upper end of the neutral policy range and risk weakening economic momentum. Lagarde also discussed higher energy futures, fiscal risks in heavily indebted euro-area countries, AI-amplified cyberattacks, cooperation with Japan, central bank digital currencies and the ECB’s Transmission Protection Instrument. She said the instrument remained available if its conditions were met. Lagarde announced she will leave the ECB in February 2027, nine months before her term ends; the Eurogroup identified Klaas Knot and Pablo Hernández de Cos as leading succession candidates. She has ruled out running for president and said chairing the World Economic Forum was one possible future option, without making a decision.