Following a reduction in June, the European Central Bank maintained its interest rate policy on Thursday.
The tight financial conditions are maintained by monetary policy. The ECB’s Governing Council stated in a statement that “…headline inflation is likely to remain above the target well into next year, while domestic price pressures are still high and services inflation is elevated.”
Amid continuous worries about inflationary pressures, especially from the labour market, the decision was largely anticipated and maintains the key interest rate at 3.75%.
With energy and food prices removed, the core print for the euro zone’s headline inflation rate dropped from 2.6% to 2.5% in June, but it still came in higher than expected at 2.9%.
The central bank was predicted by analysts to hold off on additional easing of monetary policy until it had more information about wages, economic growth, and productivity.
Source (CNBC)
