FRANKFURT, Germany (AP) — Signs of a modest economic upswing in Europe will likely let the European Central Bank keep interest rates unchanged Thursday for a fourth straight meeting.
President Christine Lagarde has said at recent meetings that monetary policy remains “in a good place” with the benchmark deposit rate at 2%. Analysts expect that language or something similar to be repeated at her news conference after the decision by the bank's rate-setting council.
The bank last cut rates at its June meeting.
Surveys of purchasing managers by S&P Global slipped slightly for December but still showed business activity expanding as the year comes to an end, reinforcing expectations that the 20 countries using the euro currency will continue to see growth of around 0.3% per quarter over the previous quarter, said Adrian Prettejohn, Europe economist at Capital Economics.
That outcome is better than feared during turbulent trade negotiations with the United States over the summer, which finally settled with a 15% tariff, or import tax, imposed on European goods by U.S. President Donald Trump.
That is not great for European exporters. But Trump had threatened higher rates and the deal struck with the European Union's executive commission appears to have removed uncertainty and made it easier for businesses to make decisions.
The economy can get by without the added boost from a cut, analysts say.
“The haze of economic uncertainty has somewhat lifted, especially regarding trade,” economist Lorenzo Codogno said. “This will give the governing council greater confidence that it is in a ‘good spot,’ likely eliminating any remaining easing bias" toward rate cuts.
On top of that, inflationary pressures remain too high for the ECB to contemplate a cut.
The headline rate of 2.1% for annual inflation in November is roughly in line with the bank's goal of 2% thanks in part to a drop in volatile energy prices. But inflation was higher at 3.5% in the services sector, which encompasses much of the economy from hairdressers and hotels to concert tickets and medical services.
Central bank rate cuts can support growth because they strongly influence borrowing rates throughout the economy, lowering credit costs and promoting credit sensitive purchases such as new homes by consumers or new production facilities by businesses. Higher rates have the opposite effect and are used to contain inflation by dampening demand for goods.
FILE - The European Central Bank is seen near the river Main in Frankfurt, Germany, early Tuesday, Dec. 9, 2025. (AP Photo/Michael Probst, File)
SEOUL, South Korea (AP) — South Korea’s Constitutional Court on Thursday formally removed the country’s impeached police chief for deploying hundreds of officers to support ousted former President Yoon Suk Yeol's brief imposition of martial law in December 2024.
The court said Cho Ji-ho “actively disrupted” legislative activities by sending police forces to the National Assembly and trying to block lawmakers from reaching the main chamber to vote to lift Yoon’s decree.
Cho also infringed upon the independence of the National Election Commission, the court said, by dispatching police to help the military’s seizure of two NEC offices. Yoon said the actions were intended to investigate unsubstantiated claims of election fraud.
Cho, who was impeached by lawmakers and arrested a week after Yoon’s power grab, is the first commissioner general of the National Police Agency to be removed by the Constitutional Court. He was granted bail in January after a Seoul criminal court cited his need for cancer treatment and faces a separate criminal trial on charges of assisting a rebellion.
Yoon imposed martial law on Dec. 3, 2024, describing the action as necessary to suppress an “anti-state” liberal opposition controlling the legislature. Hours later a quorum of lawmakers managed to break through the military and police blockade and unanimously voted to revoke the order.
Lawmakers later in December voted to impeach Yoon, suspending his powers and placing his fate with the Constitutional Court, which formally removed him from office in April. He was rearrested in July and faces a slew of serious charges including rebellion, which is punishable by life imprisonment or the death penalty.
In its ruling on Cho’s impeachment motion, the Constitutional Court said he cannot remain as the national police chief when he carried out Yoon’s orders despite being clearly aware they were “unconstitutional, unlawful.”
The ruling noted Cho and the Seoul metropolitan police chief were summoned by Yoon to a safe house hours before the declaration of martial law, where they discussed plans to carry it out with Yoon’s then defense minister.
Following Yoon’s declaration, Yoon and the Seoul police chief deployed about 300 officers around the entrances of the National Assembly, which also was swarmed by heavily armed troops, including special operations units with Blackhawk helicopters, in what the court described as an effort to block the legislative vote.
After protests by lawmakers and civilians at the National Assembly, police briefly allowed lawmakers and legislative staff to enter before sealing the grounds for more than two hours later that night after the military’s martial law command announced the suspension of political activities. A quorum of lawmakers still managed to enter with some, including current President Lee Jae Myung, climbing fences to reach the main chamber.
Cho argued his actions did not constitute support for Yoon’s martial law, claiming he sent police to the Assembly to maintain order and prevent accidental clashes.
“Considering that lawmakers and others had no choice but to enter the National Assembly by abnormal means, such as climbing over fences, due to the respondent’s order to block the entrances, the respondent’s claim is not acceptable,” the court said in a statement.
FILE - South Korea's National Police Agency Commissioner General Cho Ji Ho speaks at the National Assembly in Seoul, South Korea, Dec. 9, 2024. (Ryu Hyung-seok/Yonhap via AP, File)
Kim Sang-hwan, top center, chief justice of the Constitutional Court and the court's other justices attend a hearing to deliver a verdict on impeached police chief Cho Ji-ho at the court in Seoul, South Korea, Thursday, Dec. 18, 2025. (Kim Sung-min/Yonhap via AP)
