FRANKFURT, Dec 18 (Reuters) – European Central Bank policymakers expect to keep interest rates steady next year but they are not yet ready to take a rate cut off the table because the outlook is too uncertain, three sources told Reuters.
The ECB kept rates steady on Thursday and revised upwards some of its growth and inflation projections, a move interpreted by investors as closing the door to further rate cuts.
But sources with direct knowledge of the discussion said there was no appetite at Thursday’s meeting, which ended exceptionally early just after 0900 GMT, to declare the end of policy easing because uncertainty remains high. The ECB last cut rates in June.
Still, all three sources said that the most likely outcome was for interest rates to remain unchanged over the course of 2026, in line with market expectations.
The sources said that most policymakers see risks around the growth outlook as broadly balanced, even if a few thought that growth could turn out lower than embedded in the ECB’s own projections.
In the case of inflation, there was even less debate as most policymakers thought risks were balanced.
And ECB spokesperson declined to comment.
ECB President Christine Lagarde said the central bank remained “in a good place” but this was not “static”, meaning rates could still be changed and decisions would be made meeting by meeting.
(Reporting by Balazs Koranyi and Francesco Canepa)
Brought to you by www.srnnews.com
