ECB Holds Interest Rates Steady Amid Ongoing Inflation Concerns

The European Central Bank (ECB) held its interest rates steady at 2.4% in its July meeting, as widely expected by traders. The decision was seen as a 'wait and see' approach to policy, given the high price of oil and inflation.

Inflation in the eurozone remains above target at 2.8%, but has fallen from its peak in March. The ECB raised rates for the first time in three years last month, and some market participants had expected another hike in September. However, with early estimates suggesting that annual headline inflation may have risen to around 3% this month, further rate hikes seem uncertain.

The euro's reaction to the ECB's decision was mixed, with a slight decline against the pound. The pound's recent bounce has paused, and some analysts suggest that the current difference in rates favouring the pound might persist into the autumn.