ECB holds rates at 4% as 'more data' is needed before cuts can begin

Stubborn services price inflation

The European Central Bank has yet again decided to hold its key rate at 4%, unchanged since September 2023.

The bank's Governing Council said the incoming data has confirmed its previous assessment of the medium-term inflation outlook, as the annual rate has continued to fall led by lower food and goods price inflation. Most measures of underlying inflation are easing, the ECB added, with wage growth gradually moderating and rises in labour costs are being absorbed in profits. Yet, it noted domestic price pressures remain "strong and are keeping services price inflation high". The council also addressed the issue of when rate cuts will begin, arguing it will require further increase in its ...