FRANKFURT, Mar 04 (AFP): The European Central Bank (ECB) is expected to freeze interest rates again this week, with officials wary of starting to cut before they see more evidence that recent falls in inflation will be sustained.
After the ECB launched an unprecedented campaign of monetary tightening to tame runaway consumer prices, eurozone inflation has been slowing steadily from a peak of over 10 per cent in late 2022.
It eased to 2.6 per cent in February, according to preliminary figure, down from 2.8 per cent in January.
At the same time the outlook is bleak, with the eurozone narrowly dodging a technical recession in the second half of 2023, weighed down by a poor performance in its biggest economy, Germany.
While slowing inflation and a worsening economy should bolster arguments for rate cuts, inflation's downward path has been bumpy and officials remain worried about completing "the last mile" to the central bank's target.
The Frankfurt-based ECB's governing council is widely expected to hold the benchmark deposit rate steady at a record four per cent for a fourth straight meeting on Thursday.
ECB to hold rates again, awaiting clearer signs on inflation
FE Team | Published: March 05, 2024 00:37:14
ECB to hold rates again, awaiting clearer signs on inflation
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