The European Central Bank left interest rates unchanged during its July meeting, as data indicated the eurozone economy continued to expand at a slow rate.
The Frankfurt-based institution, in a move widely anticipated as a temporary stop before potential reductions later this year, opted against lowering borrowing costs, keeping the main interest rate steady at 2% and the deposit rate at 2.15%.
This decision followed reports from within the 20-nation currency union, showing a slight increase in private-sector activity despite prolonged stagnation in Germany and France, the bloc’s two largest economies.
Unemployment remains at historically low levels across much of the eurozone, while inflation stays subdued, providing a stable foundation for economic progress.
Nonetheless, concerns over escalating tariffs from the U.S., including potential 50% duties on steel exports, have led businesses to delay investment and hiring decisions.
Annual inflation in the eurozone reached 2% in June, up from 1.9% in May. Meanwhile, U.S. inflation climbed to 2.7% in June from 2.4% the previous month, and the UK saw inflation rise to 3.6% in the same period.
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