ECB Maintains Interest Rates, Aiming for 2% Inflation by 2025

The European Central Bank (ECB) has recently decided to pause its series of interest rate increases, signifying a strategic shift towards stabilizing existing borrowing costs. This decision, backed by ECB Governing Council member Francois Villeroy de Galhau and President Christine Lagarde, aims to keep inflation in check at a target rate of 2% by 2025.

Villeroy de Galhau has reiterated his support for this decision, stressing the necessity of a long-term perspective for economic stability. He emphasized the importance of maintaining the current interest rates for an extended duration to ensure the effectiveness of monetary policies.

The impact of this strategy is reflected in the euro area’s inflation rate, which has dropped to a two-year low of 2.9%, excluding the prices of food and energy. Villeroy pointed out that the annual inflation in the eurozone stands at 2.9%, with an underlying price increase of 4.2% in October, indicating successful policy implementation.

Additionally, the notable decrease in consumer-price growth in the euro area’s second-largest economy has been highlighted by French Finance Minister Bruno Le Maire. By keeping borrowing costs steady and interest rates unchanged, the ECB aims to sustain economic stability in the face of slowing growth.