European Central Bank holds interest rates steady

July 18 (UPI) -- The European Central Bank's Governing Council on Thursday decided to keep interest rates unchanged after cutting rates in June.

The ECB held its key interest rate steady at 3.75% as continuing inflationary pressure left the central bank wanting to stand firm for now, possibly looking at other chances to cut later in the year.

"The Governing Council today decided to keep the three key ECB interest rates unchanged," the European Central Bank said in a statement. "The incoming information broadly supports the Governing Council's previous assessment of the medium-term inflation outlook.

The bank said while some underlying inflation measures increased in May, most indicators were stable or moved down in June.

"In line with expectations, the inflationary impact of high wage growth has been buffered by profits," the bank said. "Monetary policy is keeping financing conditions restrictive. At the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year."

In lowering its rates in June, the bank cited market conditions since September 2023 had "improved markedly" along with underlying inflation data.

"The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner," the bank said. "It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim."