European Central Bank holds interest rates

The European Central Bank (ECB) decided to maintain interest rates at all-time highs following its governing council meeting in Frankfurt on Thursday. However, the ECB signaled a potential rate cut at its next meeting in June.

The benchmark deposit rate was kept at 4 percent until policymakers were confident that price pressures had stabilized. Despite this decision, some members of the council advocated for an immediate rate reduction.

In a departure from previous statements, the ECB stated that it would consider lowering rates if underlying price pressures, updated forecasts, and the effects of previous rate hikes increased confidence that inflation was approaching the bank’s 2 percent target consistently.

Eurozone inflation has declined from its peak of 10.6 percent in 2022 to 2.4 percent in March, coming close to the ECB’s target level.