FRANKFURT: The European Central Bank kept its policy rates steady on Thursday and took a more positive view on a euro zone economy that has shown resilience to global trade shocks.
The central bank for the 20 countries that share the euro raised several of its growth and inflation projections for the bloc, in a move that likely closes the door to further rate cuts in the near term.
“Inflation has been revised up for 2026, mainly because staff now expect services inflation to decline more slowly,” the ECB in a press release.
Recent growth figures for the euro zone have beaten ECB expectations, buoyed by exporters navigating US tariffs more effectively than anticipated and by domestic spending that has counterbalanced a malaise in manufacturing.
Inflation, meanwhile, has been hovering around the ECB’s 2 percent target, boosted by price hikes in the services sector, and is expected to stay there for the foreseeable future.
The more upbeat data has already led investors to draw a line under an easing cycle that saw the ECB halve its policy rate from 4 percent to 2 percent in the year to last June.
But the ECB formally kept its options open on Thursday, repeating its mantra that it would set borrowing costs “meeting-by-meeting” depending on incoming data and that it was “not pre-committing to a particular rate path”.
