European shares rose on Thursday as lower-than-expected U.S. inflation strengthened hopes for Federal Reserve interest rate cuts in 2026 and the European Central Bank took a more positive view of the economy after keeping rates on hold.

European Central Bank officials expect the cycle of interest-rate cuts to most likely be finished based on the latest outlook for growth and inflation, according to people familiar with the debate.

European Central Bank President Christine Lagarde isn't the obvious source of commentary on AI. But the ECB chief noted at the post-decision press conference that she was surprised at the level of investment,

FRANKFURT, Dec 18 (Reuters) - Following is the statement from the ‌European ​Central Bank following its policy meeting. The ‌Governing Council today decided to keep the three key ECB interest rates ​unchanged. Its updated assessment reconfirms that inflation should stabilise at the 2% target in the medium term.

Headline inflation is expected to be 1.9% in 2026, 1.8% in 2027, and 2.0% in 2028. The slight upward revision to the 2026 forecast is the result of a slower-than-expected drop in services inflation, while the 2027 drop will be the result of the delayed implementation of the second phase of the EU's Emissions Trading System (ETS2).

The new numbers are likely to lock in the view that the ECB — which has now left rates unchanged for the fourth meeting in a row — is heading for an extended period on the sidelines. Most economists and investors now expect borrowing costs to remain unchanged throughout 2026, barring a major economic shock.

European Central Bank President Christine Lagarde said on Thursday she was "fully confident" European Union leaders would agree a way to support Ukraine given the vital importance of the issue.