The ECB ended its record run of rate hikes despite new upside risks to inflation.
The European Central Bank ended its run of interest rate hikes on Thursday, despite new upside risks to inflation from oil markets amid the Israel-Hamas war.
The key rate is set to remain at a record high of 4%, where it was brought through 10 consecutive hikes that began in July 2022 and brought rates back into positive territory for the first time since 2011.
The Governing Council said recent information confirmed its medium-term outlook for inflation to reach 2.1%.
“Inflation is still expected to stay too high for too long, and domestic price pressures remain strong. At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease,” it said in a statement.
Markets had priced in a more than 98% chance of a hold, after the ECB gave a strong indication at its previous meeting that rates had peaked.
The euro was 0.15% lower against the British pound at 1:40 p.
