by Francesco Canepa and Balazs Koranyi
FRANKFURT (Reuters) -The European Central Bank (ECB) decided on Thursday, as expected, to maintain its key rates at their current levels but took a first step towards lowering the cost of credit by affirming that inflation was slowing more quickly than She hadn’t planned it a few months ago.
The deposit rate thus remains at 4.0%, its highest level since the creation of the euro in 1999. It reached this threshold in September 2023 after ten consecutive increases.
The ECB has slightly modified its message to take into account the expected continuation of the fall in inflation and the new weaker economic projections.
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“Since the last meeting of the Governing Council in January, inflation has continued to slow,” writes the ECB in its monetary policy statement.
“Most measures of underlying inflation have fallen further, but domestic price pressures remain high, notably due to strong wage growth,” adds the ECB.
After seeking to dissuade market participants from betting on a rate cut in early spring, the central bank carefully avoided making any promises on Thursday.
On the contrary, she reaffirmed that future decisions would depend in part on the evolution of underlying inflation, which excludes the most volatile prices and has proven particularly stubborn.
The President of the ECB, Christine Lagarde, is due to comment on the institution’s announcements during a press conference scheduled for 1:45 p.m. GMT.
A Reuters survey, published at the end of February, showed that the vast majority of economists expected a further pause in the ECB’s rate hike and that the first monetary easing would not take place until June.
(Written by Claude Chendjou, edited by Blandine Hénault)
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