EUROPEAN Central Bank President Christine Lagarde said on Thursday that interest rates in the eurozone had reached their peak after rising rapidly in response to high inflation last year.

“I think that we are at the highest point and barring additional shocks... rates are very probably not going to continue to rise,” Lagarde said in an interview on French broadcaster France 2.

“I think they have reached their peak,” she said, but refused to be drawn on a possible cut to borrowing costs.

“I cannot give you a date,” she told her interviewer.

“If we win the battle against inflation, if we are sure inflation will be at two per cent, then the rates will start to go down,” Lagarde said, referring to the ECB’s inflation target.

The ECB raised rates higher and faster than ever to tackle sky-high inflation, driven by soaring energy prices in the wake of the Russian invasion of Ukraine in 2022.

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The pace of consumer price rises has cooled significantly since inflation hit its double-digit peak at the end of 2022, but remains above the ECB’s target.

Most recently, eurozone inflation rose slightly in December to 2.9 per cent, an increase that was widely anticipated.

At its last meeting at the end of last year, the ECB warned that the fight was not over but held borrowing costs steady for a second consecutive time.

The pause left the benchmark deposit rate at a record high of four per cent. AFP