ECB Holds Rates Amid Oil Price Surge, September Hike Speculation

The European Central Bank (ECB) has decided to keep interest rates unchanged in response to surging oil prices due to the escalating Iran conflict.

The decision was announced by ECB President Christine Lagarde, who emphasized that the central bank will assess incoming data before making monetary policy decisions.

Lagarde noted that energy price increases can drive inflation sharply and abruptly higher, but stressed that the ECB remains well-positioned to navigate uncertainty caused by the conflict.

The ECB's decision follows a 25 basis point rate hike in June, which brought interest rates on the deposit facility, main refinancing operations, and marginal lending facility to 2.25%, 2.4%, and 2.65% respectively.