ECB leaves key rates unchanged due to modest economic activity
The European Central Bank has decided to keep key interest rates unchanged, citing modest economic growth. Recent data indicates some improvement in economic activity, with services partly recovering and digital services remaining robust.
Key indicators suggest that economic activity will remain modest, with energy prices feeding into higher inflation. Firms expect to raise selling prices, while underlying inflation is contained.
The labour market is expected to remain weaker than before the conflict, with moderate wage growth and rising labour productivity helping to contain unit labour cost growth. Most measures of longer-term inflation expectations stand at around 2%.