ECB Holds Fire on Interest Rates Amid Ongoing Energy Price Volatility

The European Central Bank (ECB) has decided to leave interest rates unchanged at 2.25% amid uncertainty over how volatile energy prices will affect inflation.

The decision was made on Thursday, with ECB President Christine Lagarde stating that 'uncertainty remains high and the full inflationary impact of the energy shock has yet to play out.'

Lagarde pointed out that as long as energy prices stay high, they are likely to drive up broader inflation.

The ECB had previously raised its benchmark rate by a quarter-point in June to dampen the impact of higher oil prices on consumer prices.