The ECB is expected to keep interest rates unchanged today

The European Central Bank (ECB) is expected to announce this Thursday that it will maintain key interest rates despite the slowdown in inflation in February.

For the fourth time in a row since October, ECB President Christine Lagarde is expected to announce after the council meeting that three interest rates will remain unchanged, according to analysts consulted by Lusa.

Eurozone annual inflation slowed to 2.6% in February, 0.2 percentage points (pp) below the level recorded in January, reflecting smaller increases in food prices, according to a forecast published by Eurostat.

Although the ECB stressed that decisions are being made based on economic data and inflation is approaching the central bank’s 2% target, the ECB reiterated that the eurozone must be further along in the disinflation process before there is confidence that the target inflation rate can be reached. achieved sustainably.

After raising rates tenfold since mid-2022, taking them to their highest level ever, the ECB decided to take a “pause” at its latest meetings before easing monetary policy.

Despite expectations, Bank of Portugal (BdP) Governor Mario Centeno said in an interview with Bloomberg in late February that the ECB should be open to discussing a rate cut at today’s meeting.

With markets and analysts ruling out the possibility of a rate cut this month, attention is focused on the “tone” the ECB president will use at the press conference and the economic forecast update that will be released.

The interest rate applicable to core refinancing transactions and the interest rates applicable to margin lending and standing deposit are set at 4.50%, 4.75% and 4.00%, respectively.

When the ECB changes key interest rates, this is reflected throughout the economy, affecting, for example, bank loans, general market loans, home loans, interest rates on bank deposits or other investment instruments.