Source: News Watch.
The European Central Bank held a monetary policy meeting on 26 October and decided to maintain the three key interest rates in the euro area. This was the first time that the European Central Bank had stopped raising interest rates at a monetary policy conference since July 2022.
Previously, the European Central Bank had increased interest rates ten times, totalling 450 basis points. According to analysts, owing to weak growth prospects in the euro area, the ECB will maintain interest rates at current levels for a longer period of time.
In a press conference, the President of the European Central Bank, Lagarde, stated that she did not exclude the possibility of a further increase, adding that it was “well too early” to discuss a possible reduction.
As the impact of rising interest rates is “expanding”, according to Rajad, economic growth “may remain weak for the rest of the year”. When asked whether a new round of the Palestinian-Israeli conflict would raise the risk of a further surge in oil prices, Raghadd said that the ECB was “very concerned” about the effects of the tension in the Middle East. She added, however, that the eurozone was “now a completely different economy” compared to last year's energy price boom, and that it was unlikely that they would infiltrate wider price pressures this time.