Central Banks Stand Firm on Interest Rates and Prepare to Tackle Inflation

The European Central Bank and the Bank of England have decided to keep interest rates unchanged, signaling that they believe inflation is under control. The ECB has cut its inflation forecasts for next year and plans to accelerate its exit from a pandemic stimulus program, indicating its expectation that price growth will be tamed soon. This dovish shift is reflected in the removal of a phrase from previous statements that suggested inflation would remain high for an extended period.