The European Central Bank (ECB) maintains its benchmark interest rate of two percent at a rate meeting on Thursday.
This is what the central bank writes in a press release.
The bank points out in the statement that inflation has increased and that there is a risk of lower growth. The development must be seen in light of the war in the Middle East and the rising energy prices, which are a consequence of the war.
The ECB will monitor the development in inflation and growth closely in the coming time in order to adjust its monetary policy, it says.
According to chief economist Las Olsen from Danske Bank, it is unclear what will happen to interest rates now that the ECB has made its interest rate announcement.
- There is no clear arrow in the decision on what will happen next.
- The bank notes that high energy prices mean both higher inflation and lower growth prospects, which means that it can point both up and down for interest rates, says Las Olsen in a written comment.
He adds that he sees it as "fairly likely" that the European Central Bank will respond to the higher prices with interest rate increases at their upcoming meetings.
Philip Jagd, head of equities at Sampension, calls it "not the biggest surprise in the world" in a written comment that the ECB is keeping interest rates unchanged.
- Although inflation in Europe is moving in the wrong direction and has just hit its highest level since September 2023, which the ECB is of course keeping a close eye on, the outlook for developments in the Middle East and the spillover effects on the European economy is currently rather hazy, he says and adds:
- Therefore, Central Bank Governor Christine Lagarde and co. are awaiting greater clarity about the situation before they possibly chooses to press the interest rate button.
/ritzau/
