European Central Bank leaves interest rates unchanged…

European Central Bank leaves interest rates unchanged despite trade war uncertainty – as it happened

European Central Bank (ECB) President Christine Lagarde addresses the media, at the ECB headquarters in Frankfurt. Photograph: Heiko Becker/Reuters

3.12pm BST

Closing summary: ECB in a 'good place' amid Trump threats

Christine Lagarde appeared to be in relatively relaxed mood this afternoon as she took questions from the press pack in Frankfurt: she said the European Central Bank is in a “good place” – or as good as it can be with the threat of Donald Trump’s tariffs.

The ECB will be “data-dependent” on whether the next move in interest rates is up or down, she said repeatedly.

She said that the prospect of a 15% tariffs between the EU and US remained “conjecture”, but suggested the ECB would not exclude any actions depending on what happens with the trade war.

David Rea, chief economist for Europe at JLL, a property company, said:

The ECB’s decision to hold rates indicates it is keeping its powder dry as the economic situation continues to evolve. The bank is already significantly ahead of most central banks in terms of rates cut, and so the continuation of the neutral policy now means the ECB is in a good position to move rates in whichever direction necessary in future without the need for large swings.

Charlie Cornes, senior economist at the Centre for Economics and Business Research, said:

While inflationary pressures have eased considerably and the growth outlook for the Eurozone still relatively subdued, there is impetus for the ECB to move further with its loosening cycle. That said, uncertainty amidst ongoing trade negotiations with the US are holding the ECB back.

Maintaining its commitment to price stability, the ECB is likely to proceed cautiously. As such, we expect that the ECB will conduct only one further rate cut before the end of 2025.

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