ECB Maintains High Rates as Inflation Control Strategy Continues

The European Central Bank (ECB) will maintain high interest rates until inflation is firmly under control. This decision mirrors the cautious approach of the U.S. Federal Reserve. Home buyers and businesses may not see rate cuts until at least October. High rates have slowed economic growth but stabilized the job market.

Home buyers and businesses in Europe awaiting lower interest rates will have to wait longer. The European Central Bank (ECB) remains focused on firmly controlling inflation before reducing its benchmark rate.

The ECB's cautious stance is similar to that of the U.S. Federal Reserve, which is also expected to delay rate cuts. Economists suggest that the ECB's key rate will remain unchanged at 3.75% during their upcoming meeting. There might not be any rate cuts until the October meeting.

ECB President Christine Lagarde is likely to reiterate that the bank is assessing inflation trends based on latest data and will decide on rates accordingly. While inflation has decreased from its peak, it remains above the ECB's target, and the high rates have hindered growth. On a positive note, the labor market remains strong, signaling that higher rates have not led to a recession.

(With inputs from agencies.)