European Central Bank leaves rates unchanged as expected

(Sharecast News) - The European Central Bank left interest rates unchanged at 2% on Thursday, as widely expected. The interest rates on the main refinancing operations and the marginal lending facility were also left unchanged, at 2.15% and 2.40% respectively.

The Bank said in a statement: "The war in the Middle East has led to a sharp increase in energy prices, pushing up inflation and weighing on economic sentiment. The implications of the war for medium-term inflation and economic activity will depend on the intensity and duration of the energy price shock and the scale of its indirect and second-round effects.

"The longer the war continues and the longer energy prices remain high, the stronger is the likely impact on broader inflation and the economy."

The ECB said it remains "well positioned" to navigate the current uncertainty and will "closely monitor" the situation and follow a data-dependent and meeting-by-meeting approach to determine the appropriate policy stance.