ECB holds interest rates at record high
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The news: The European Central Bank has held rates at a record 4% high for a fourth consecutive Governing Council meeting.
The numbers: The ECB's interest rate on the main refinancing operations, the interest rates on the marginal lending facility, and the deposit facility will remain unchanged, at 4.50%, 4.75% and 4.00% respectively.
The context: A statement from the ECB explains that while it has decided to hold rates steady since its last meeting in January, inflation has continued to decline. The latest ECB projections show that inflation has been revised down for 2024, largely a reflection of lower contribution from energy prices. ECB staff now predict inflation to average 2.3% in 2024, 2.0% in 2025 and 1.9% in 2026.
The central bank reiterated its goal of bringing inflation back down to its 2% target, stating that the ECB’s current rates are at levels which if maintained, will substantially contribute to reaching this goal.
What they said: Following a press conference on the ECB decision, the central bank’s president Christine Lagarde told reporters in Frankfurt that while there is a definite slowdown in inflation, “We clearly need more evidence, more detail […] We know that this data will come in the next few months. We will know a little more in April, but we will know a lot more in June.”
The sources: ECB Press Release, Bloomberg
