The ECB left all three of its key interest rates unchanged today and noted that while inflation is expected to ‘stay too high for too long’, inflation dropped markedly in September due to strong base effects. The central bank added that ‘The Governing Council’s past interest rate increases continue to be transmitted forcefully into financing conditions. This is increasingly dampening demand and thereby helps push down inflation.’ ECB President Lagarde’s commentary at the upcoming press conference may give traders a clearer view of the thinking behind the central bank’s decision.
