ECB Maintains Steady Interest Rates Amid Economic Uncertainty

The European Central Bank (ECB) has decided to hold interest rates steady at a record high of 4%, ending a series of 10 consecutive rate hikes. Despite new risks to inflation from the Israel-Hamas war, the ECB confirmed its medium-term outlook for inflation at 2.1%. The decision aligns with other major central banks, which have either reached or are nearing peak interest rates. The ECB aims to maintain tight monetary policy to meet its inflation forecasts, but must also contend with weak business activity and sluggish growth in the euro zone. The possibility of rate cuts was deemed premature, and the focus remains on data-dependent decision-making.