ECB keeps interest rates unchanged amid Iran war inflation
The European Central Bank has kept its base interest rates steady but said it was "closely monitoring" the energy price shock. The impact of the war against Iran on energy costs has pushed inflation over ECB targets.
The European Central Bank (ECB) decided to keep its interest rates unchanged on Thursday, amid concerns over the economic impact of the recent Iran war. While the ECB had previously raised rates last month and hinted at further increases, a period of relatively stable data led to a more cautious approach. The Frankfurt-based central bank, which oversees the eurozone's single currency, stated that energy prices were currently in line with projections from June but were significantly higher than levels prior to the conflict in the Middle East.
The ECB emphasized that uncertainty remained high, and the full inflationary effects of the energy shock had yet to manifest. It noted that it would continue to closely monitor the intensity, duration, and indirect and second-round effects of the shock. ECB President Christine Lagarde indicated that future rate increases were possible if necessary, while stressing that most inflation pressure was currently linked to energy costs rather than essentials like food.
Written by urgent.news from DW English (Business)'s reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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