The European Central Bank (ECB) kept its interest rates unchanged on Thursday for the third consecutive month, in line with expectations.
The main policy rate remains at 2%, while the deposit rate is maintained at 2.15%, as the eurozone continues to navigate its ongoing easing cycle, News.Az reports, citing foreign media.
In its justification for the hold, the ECB said: "The new ECB staff projections present a picture of inflation similar to that projected in June.
"The Governing Council is determined to ensure that inflation stabilises at its 2% target in the medium term. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance."
"We are not pre-committing to a particular rate path," ECB president Christine Lagarde said in a press conference following the announcement.
"Higher tariffs, a stronger euro and increased global competition are expected to hold growth back," added Legarde, also saying that these factors should fade next year.
The ECB has already halved its policy rate from a record high of 4% in the space of a year after taming a surge in prices that followed the end of the COVID-19 pandemic and Russia’s invasion of Ukraine.
It cut interest rates by a quarter of a percentage point for the eighth time in a year in June, as rate setters attempt to support the euro economy after the turmoil caused by US president Donald Trump’s trade war.
The bank then held rates at 2% in July, with ECB president Christine Lagarde saying that the bank is in a "good place".
Bets had been cast on another interest rate hold amid data showing inflation edging above the central bank's 2% target. Earlier in September, preliminary figures showed euro area inflation hitting 2.1% in August.
Looking at the main components of inflation, food, alcohol & tobacco are expected to have had the highest annual rate in August at 3.2%, compared with 3.3% in July. This is followed by services at 3.1% compared with 3.2% in July and non-energy industrial goods at 0.8% which is stable compared with July.
Energy prices brought the overall rate lower, decreasing 1.9%, compared with a 2.4% dip in July.
