ECB expected to keep interest rates steady as inflation remains controlled
The European Central Bank (ECB) is set to hold interest rates steady this week for its third consecutive meeting, with inflation remaining subdued and signs of improvement in the eurozone economy, News.Az reports, citing foreign media.
Following a year-long series of rate cuts, the ECB has maintained its key deposit rate at 2% since July. Inflation has recently stabilized around the central bank’s 2% target, as Europe has weathered U.S. tariffs better than initially anticipated.
Despite these positive signals, ECB officials face several challenges, including rising borrowing costs in France amid a political crisis and the ongoing risk of renewed trade tensions.
ECB President Christine Lagarde stated in a September speech in Helsinki that the central bank is currently “in a good place,” reinforcing expectations that borrowing costs will remain unchanged at Thursday’s meeting. “With policy rates now at 2%, we are well placed to respond if the risks to inflation shift, or if new shocks emerge that threaten our target,” Lagarde said.
Meanwhile, the U.S. Federal Reserve is expected to make its second consecutive rate cut on Wednesday, amid growing concerns over the labor market, layoffs, and reluctance among businesses to hire.
The eurozone economy, long struggling with slow growth—especially in Germany—appears slightly stronger than earlier in the year. At its last meeting, the ECB raised growth forecasts for the eurozone for both this year and next, offering cautious optimism for the bloc’s economic outlook.
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