The European Central Bank (ECB) has left its benchmark interest rate unchanged at 4% and signalled an early end to its bond purchases that have helped to support the Euro currency.
The decisions by the ECB were widely expected by economists and market watchers.
However, the European Central Bank retained a hawkish tone in contrast to the U.S. Federal Reserve that has signalled three interest rate cuts in 2024.
Officials with the ECB said that lowering interest rates was not even discussed at its latest meeting and that it planned to keep monetary policy restrictive for the foreseeable future.
Europe’s central bank continues to try to lower inflation that is currently at a 3.6% annualized rate across the European Union (EU). The central bank targets inflation at 2%.
At the same time that the ECB made its rate announcement, the Bank of England said that it was holding its trendsetting interest rate at its current level of 5.25%.
Like the ECB, the Bank of England said that it intends to keep interest rates high for an “extended period” to lower inflation.
Market reaction to the interest decisions in Europe were muted.
The Euro currency and the German 10-year bond yield that serves as a benchmark for the wider European economic zone were unchanged on the news.
