(Kitco News) - The Governing Council of the ECB decided to maintain their key interest rate unchanged at 2.15% at today's meeting, as expected.
“While the incoming information has been broadly consistent with the Governing Council’s previous assessment of the inflation outlook, the upside risks to inflation and the downside risks to growth have intensified,” they said. “The Governing Council is committed to setting monetary policy to ensure that inflation stabilises at the 2% target in the medium term.”
The ECB said the war in the Middle East “has led to a sharp increase in energy prices, pushing up inflation and weighing on economic sentiment,” adding that “the implications of the war for medium-term inflation and economic activity will depend on the intensity and duration of the energy price shock and the scale of its indirect and second-round effects.”
“The longer the war continues and the longer energy prices remain high, the stronger is the likely impact on broader inflation and the economy.”
The ECB said longer-term inflation expectations “remain well anchored, although inflation expectations over shorter horizons have moved up significantly.”
