ECB to hold interest rates steady with inflation subdued
FRANKFURT
The European Central Bank is expected to hold interest rates steady this week for its third straight meeting, with inflation under control and the long-struggling eurozone economy looking healthier.
Following a year-long series of cuts, the ECB has kept its key deposit rate on hold at 2 percent since July.
Inflation has settled around the central bank's 2 percent target in recent months, as Europe has weathered Donald Trump's tariff onslaught better than initially feared.
ECB officials still face many headwinds: France's political crisis has pushed up borrowing costs in the eurozone's second-biggest economy, and the risk of a flare-up in trade tensions lingers.
But for now, the central bank is "in a good place," ECB President Christine Lagarde said in a September speech in Helsinki, bolstering expectations of no change to borrowing costs at the Oct. 30 meeting.
The eurozone economy has long been treading water, dragged down in particular by a poor performance in Germany, with growth rates lagging far behind those of China and the United States.
But the picture for the 20 countries that use the euro looks a little brighter than in the first half of the year.
The ECB raised eurozone growth forecasts for this year and next at their last meeting.
Thursday's decision seems a done deal, economist Michel Martinez of Societe Generale told AFP, calling the meeting "a moment to take stock rather than to take action."
Carsten Brzeski of Dutch bank ING said there were "some valid dovish arguments that could still force the central bank to cut once again at the December meeting."
The risks range from a possible adverse impact of US tariffs down the line to delays to Germany's planned defence spending splurge and a deepening of France's political crisis, Brzeski said.
