world-economy

ECB Signals Rate Pause as Policymakers Weigh Iran War Economic Fallout

The European Central Bank is expected to hold interest rates steady at 2% on Thursday as officials assess the full economic consequences of escalating Middle East tensions. ECB Vice President Luis de Guindos called for caution on rate decisions, noting that the conflict's impact on growth remains uncertain. President Christine Lagarde said the central bank must avoid both premature action and delayed response as inflation pressures emerge. Fellow policymaker Francois Villeroy de Galhau stressed the need for readiness should price increases spread beyond energy sectors. An economist survey confirmed expectations for unchanged rates. Recent German inflation data came in below forecasts, supporting the ECB's measured approach as officials evaluate whether oil-driven price gains will prove temporary or signal broader economic disruption.