The ECB will maintain interest rates at 4.5% on January 25, 2024

The Governing Council of the European Central Bank (ECB) decided on Thursday to maintain interest rates, leaving the reference rate for its refinancing operations at 4.50%, while the deposit rate remains at 4% and the lending facility at 4.75%. .

In this way the issuing institution leaves the rates unchanged for third consecutive meeting since he hit the brakes at his October meeting after 10 consecutive increases in the cash price, taking it to the highest level in more than two decades.

The ‘guardian of the euro’ had raised rates by 450 basis points during the rate hike cycle, which started in July 2022, although markets are now betting that the ECB will cut the benchmark rate, something some sources said could happen this summer. analysts, such as those from Bank of America.

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

Furthermore, Eurostat confirmed that eurozone GDP contracted by 0.1% in the third quarter compared to the previous three months, when it grew by 0.1%.

Such is the behavior of the The eurozone economy was noticeably worse between July and September than that of the United States, where GDP rose by 1.3% quarter on quarter, although this was in line with the performance of the United Kingdom, which also lost 0.1% in the third quarter when the data for the period at the end of December.