CdM | The European Central Bank (ECB) has kept interest rates at 2% and acknowledges that “upside risks to inflation and downside risks to growth have intensified”. However, it states that “the Governing Council remains well positioned to deal with the current uncertainty”.
As stated in the press release following the April meeting, the eurozone entered this period of sharp rises in energy prices with inflation close to the 2% target, and the economy has shown resilience in recent quarters.
“Long-term inflation expectations remain stable, although short-term expectations have risen significantly,” the text states.
In any case, the European body reiterates that it will monitor the situation “closely” and “adopt a data-driven and meeting-by-meeting approach to determine the most appropriate monetary policy stance”.
In particular, its decisions on interest rates will be based on its assessment of the inflation outlook and associated risks, in the light of economic and financial data as they become available, as well as the dynamics of underlying inflation and the effectiveness of monetary policy transmission.
“The Governing Council does not commit in advance to a specific interest rate path”, although it does “commit to conducting monetary policy to ensure that inflation is stabilised at the 2% target over the medium term”, they stress.
