ECB Holds Rates Steady Amid Energy Price Volatility

The European Central Bank (ECB) has kept borrowing costs unchanged at 2.25% amid concerns about inflationary pressures and volatility in energy prices.

Despite keeping rates on hold, the ECB left room for further tightening in coming months as a widening conflict in the Middle East pushes up energy prices again.

Susanah Streeter, Chief Investment Strategist at Wealth Club, noted that the ECB is in 'wait and see mode' and needs more data to assess the outlook. She added that policymakers want to be driven by data rather than making knee-jerk reactions.

Market participants expect two more rate increases by year-end, with interest-rate sensitive two-year bond yields across the euro area holding higher on the day.