The Governing Council of the European Central Bank (ECB) at a meeting on Thursday, March 7, kept interest rates unchanged.
This is stated in the message, published after the meeting of the Board of Governors of the regulator.
The ECB kept three key rates unchanged at the fourth consecutive meeting. The benchmark interest rate remained at 4.5%, the marginal lending rate at 4.75% and the deposit rate at 4%. The European regulator remains committed to bringing inflation back to its medium-term target of 2%, the press release said. The Governing Council believes that maintaining current rate levels for long enough will make a significant contribution to returning consumer price growth to the 2% target.
Interestingly, inflation forecasts have been revised downward, especially for 2024.
The regulator expects inflation to average 2.3% in 2024, down from an earlier forecast of 2.7%. The figure will be 2% in 2025 and 1.9% in 2026. Inflation forecasts excluding energy and food were also revised downward, with inflation to average 2.6% in 2024, 2.1% in 2025, and 2% in 2026. While most measures of core inflation have fallen further, domestic price pressures remain high partly due to strong wage growth, the ECB said. The regulator's decision matched market expectations. None of the 73 economists who took part in a February 26-29 questionReuters poll expected a rate cut at the March 7 meeting.