The European Central Bank (ECB) kept its main interest rates unchanged during a meeting of its Governing Council held in Florence.
This decision comes after a series of four consecutive interest rate cuts, totaling 1% since the beginning of 2025.
Interest rate fixed after 4 reductions
The central bank kept its main interest rate at 2%.
This was expected in the markets, after it had reached 3% at the beginning of the year.
Justifications for the decision
The European Central Bank attributed its decision to inflation remaining close to its medium-term target of 2%.
He stressed that the board’s assessment of inflation expectations “has changed little”.
The bank noted that the economy continues to grow despite the challenging global environment, supported by a strong labor market.
Strong balance sheets in the private sector, in addition to the impact of previous interest rate cuts.
Lagarde’s statement: “The recession is over.”
In previous statements, European Central Bank President Christine Lagarde emphasized that “the domestic economy is showing resilience.”
She added that “the deflation process is over, and inflation is at the level we want.”
Recent data supports the bank’s position, with the core consumer price index in the Eurozone rising by 2.4%.
On an annual basis in September, it remained close to the bank’s target of 2%.
GDP growth in the third quarter exceeded expectations.
rose by 0.2% compared to the previous quarter, exceeding analysts’ expectations of 0.1%.
The European Central Bank indicated that the outlook remains “uncertain”.
Especially in light of ongoing global trade disputes and geopolitical tensions,
This justifies the temporary halt to the reduction process in order to maintain stability.
