The European Central Bank (ECB) decided today to leave its key interest rates unchanged. The deposit facility rate remains at 2.00%, the main refinancing rate stands at 2.15%, and the marginal lending facility rate remains at 2.40%.
Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE, says:
“A rate rise would have been premature at this point. Inflation indicators have changed little in the beginning of the year. However, the war in Iran and rising energy prices are increasing inflationary pressure. At the same time, economic growth is weak. This combination carries the risk of stagflation. The ECB must therefore continue to make data-driven decisions without unsettling the markets. Whether the ECB will adjust the key interest rate in the coming months depends heavily on the duration of the conflicts in the Middle East and possible second round effects.”
Scientific Contact
Prof. Dr. Florian Heider
Scientific Director, Co-Director Department "Financial Intermediation"
