The European Central Bank kept interest rates at 2.15% for the third consecutive time, enjoying a period of low inflation and stable growth amid global uncertainty. The ECB said its current monetary policy was in a “good position” and was not committed to any new direction.
President Christine Lagarde stressed that the ECB can tolerate small deviations from its 2% inflation target, but did not rule out further easing if US tariffs continue to weigh on the global economy.
Latest data showed the eurozone economy grew 0.2% quarter-on-quarter, better than expected, with business activity rising and sentiment positive in Germany. However, the industrial sector and exports remained weak due to trade pressures from China and the US.
Chief Economist Philip Lane said the risk of low inflation could support a small cut, but most analysts expect rates to remain steady as uncertainty is expected to ease and German fiscal policy loosens.
The ECB is expected to reassess policy in December when it publishes new projections including preliminary data for 2028, which will be a real test of the bank's willingness to maintain inflation around target without reacting immediately.
