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ECB holds interest rates steady after 10 consecutive hikes

The European Central Bank headquarters.

Daniel Roland | Afp | Getty Images

The European Central Bank ended its run of interest rate hikes on Thursday, despite new upside risks to inflation from oil markets amid the Israel-Hamas war.

The key rate is set to remain at a record high of 4%, where it was brought through 10 consecutive hikes that began in July 2022 and pushed rates back into positive territory for the first time since 2011.

The Governing Council said recent information confirmed its medium-term outlook for inflation at 2.1%.

“Inflation is still expected to stay too high for too long, and domestic price pressures remain strong. At the same time, inflation dropped markedly in September, including due to strong base effects, and most measures of underlying inflation have continued to ease,” it said in a statement.

Markets had priced in a more than 98% chance of a hold, after the ECB gave a strong indication at its previous meeting that rates had peaked.

The euro was 0.15% lower against the British pound at 1:40 p.m. London time, declining slightly after the announcement. The European currency was 0.2% down against the U.S. dollar.

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Oil price shock could push ECB into another hike, National Bank of Belgium governor said

Higher for longer



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