European Central Bank leaves interest rates unchanged
The European Central Bank (ECB) left interest rates unchanged at 0.0%, a move widely expected by economists, despite the growing threat of inflation.
Policymakers also kept interest rates on the marginal lending facility and the deposit facility at 0.25% and -0.5%, respectively.
The central bank said on Thursday that its Pandemic Emergency Purchase Program (PEPP) would be “moderately lower” than the previous two quarters, with an overall size left at â¬ 1.85 billion (1, Â£ 56bn, $ 2.14bn) at least until the end of March 2022.
Net purchases under the Asset Purchase Program (APP) will also continue at a monthly pace of â¬ 20 billion until shortly before the first interest rate hike.
It comes as the ECB has said inflation is expected to “stay at current or lower levels” until it hits 2% “well before the end of its projection horizon and sustainably for the rest of the year. projection horizon “.
“The Governing Council is ready to adjust all its instruments, if necessary, to ensure that inflation stabilizes at its target of 2% in the medium term,” the ECB said in a brief statement.
ECB President Christine Lagarde will give a press conference at 1:30 p.m. UK time with more details.
“No change in ECB rates comes as a surprise. As has been the case for some time, it all depends on what he has to say,” Prime Minister Miton’s Neil Birrell said.
“The press briefing may provide some insight, but conditions in the eurozone are such that any indication of a policy change is unlikely to occur.”
This month, the Reserve Bank of New Zealand (RBNZ) got the ball rolling by raising its key policy rate by 25 basis points to 0.5% in response to rising inflation expectations, while the Bank of Canada ended its own bond buying program on Wednesday.
Watch out: will interest rates stay low forever?