Christine Lagarde, president of the European Central Bank (ECB).
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The European Central Bank left interest rates unchanged on Thursday, after implementing a cut in June.
“Monetary policy is keeping financing conditions restrictive. At the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year,” the Governing Council said in a statement.
The decision — which keeps the key interest rate at 3.75% — was widely expected amid ongoing concern over inflationary pressures, particularly from the labor market.
Euro zone headline inflation dipped to 2.5% in June from 2.6% previously, but the core print — excluding the volatile components of energy and food — came in above a consensus forecast, holding steady at 2.9%.
Analysts expected the central bank to wait for more data across wages, economic growth and productivity before easing monetary policy further.
The ECB cited the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission as the reasons behind trimming rates in June — in the bank’s first such cut since 2019.
This is a breaking news story and will be updated shortly.
