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ECB holds rates steady as it monitors energy shock inflation spillovers

The ECB kept the deposit rate at 2.25% and said the full inflation impact of the energy shock has yet to play out, with second-round effects still under watch.

Reported · Written up by our desk · Central Banks

The European Central Bank left its key interest rates unchanged, keeping the deposit rate at 2.25%, as widely expected, according to Action Forex.

In its policy statement, the ECB said renewed energy market volatility has complicated the inflation outlook and that the outlook for energy prices remains well above levels seen before the Middle East conflict.

The Governing Council emphasized it is closely monitoring the intensity and duration of the shock, along with its indirect and second-round effects, while noting that the full inflationary impact of the energy shock has yet to play out.

The ECB reiterated its commitment to setting policy so inflation stabilizes at its 2% target in the medium term, while maintaining a data-dependent, meeting-by-meeting approach and not precommitting to a specific rate path.

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