European Central Bank holds interest rates steady at 4%

Maintains higher for longer narrative

The European Central Bank has said it will keep interest rates unchanged, the second hold since it began its unprecedented streak of consecutive hikes in July 2022.

Following its policy meeting today (14 October), the central bank's governing council decided the benchmark deposit rate would stay on hold at 4%.  Markets are now speculating as to when the central bank will begin cutting after its first pause on 26 October. However, policymakers have pushed back against this narrative, noting that the central bank is "determined to ensure that inflation returns to its 2% medium-term target in a timely manner".  Deep Dive: Did central banks get it right in 2023? "Based on its current assessment, the governing council considers that the key ECB int...