Christine Lagarde, the ECB President, stated during a press conference that elevated energy prices are causing inflation in the eurozone to remain significantly above the 2% target.
European Central Bank
She believes that inflation will substantially surpass the target level in the upcoming quarters.
In September, inflation in the eurozone rose to 3.8% year-on-year, marking a new peak since September 2023. Energy prices surged by 18.9% following a rise of 14.3% the previous month.
The ECB maintained all three key interest rates unchanged following its October meeting. The deposit rate remained at 2.5% annually, the main refinancing operations rate was 2.65%, and the margin loans rate stood at 2.9%. The choice aligned with the forecasts of analysts and market players.
Lagarde stated that the ECB’s governing council unanimously decided against altering rates, even as the topic of raising borrowing costs was addressed in the meeting. Following discussions, the ECB management reached an agreement that the regulator is presently well-placed to wait for new information before altering the direction of monetary policy.
Analysts and market participants widely anticipate that the ECB will increase rates by 25 bps at the final meeting of the year, scheduled for December 16-17. At this point, a complete set of statistical data will be made available, enabling an evaluation of the eurozone’s economic condition and inflation levels, along with the impact of the surge in energy costs.
source: reuters.com
