The ECB sticks to the script and keeps rates at 4.5% for the third consecutive meeting

The Governing Council of the European Central Bank (ECB) decided this Thursday to maintain interest rates, so that the reference rate for its refinancing operations will remain at 4.50%, while the deposit rate will remain at 4% and the loan facility at 4.75%.

In this way, the issuing institute leaves the rates unchanged for third consecutive meeting since he stepped on the brakes at his October meeting, after carrying out ten consecutive increases in the price of money, which placed it at its highest level in more than 20 years.

The ‘guardian of the euro’ had raised rates by 450 basis points during the hike cycle, which began in July 2022, although now the markets are betting that the ECB will lower the reference rate, something that could happen this summer, according to certain analysts, such as those at Bank of America.

The ECB’s decision comes after the euro zone’s annual inflation rate in December was 2.9%, half a percentage point above the price increase recorded in the previous month and its highest reading since October. By excluding the impact of energy, food, alcohol and tobacco from the calculation, the underlying rate moderated by two tenths, to 3.4%.

Furthermore, Eurostat confirmed that eurozone GDP recorded a contraction of 0.1% in the third quarter compared to the previous three months, when it expanded by 0.1%.

Thus, the behavior of the Eurozone economy between July and September was noticeably worse than that observed in the United States, where GDP increased by 1.3% quarterly, although it was in line with the performance of the United Kingdom, which also lost 0.1% in the third quarter when revising its data for the period at the end from December.