European Central Bank Holds Firm on Interest Rates Amid Persistent Inflation

The European Central Bank (ECB) has opted to keep its key interest rate benchmark unchanged at 3.75%, marking a cautious approach from President Christine Lagarde and the rate-setting council. The decision underscores the ECB's commitment to ensuring persistent inflation is firmly controlled before reducing rates.

The unchanged rate leaves the deposit rate at 3.75%, where it has stood since June 6. The ECB highlighted ongoing domestic price pressures, elevated services inflation, and headline inflation likely remaining above the target well into the next year as key factors in maintaining the current rate.

This decision means that home buyers and businesses in Europe will have to wait, possibly until the bank's September meeting or beyond, for more affordable credit. The ECB's stance aligns with that of the U.S. Federal Reserve, which is also expected to hold off lowering rates in its upcoming meeting.

(With inputs from agencies.)