ECB Holds Rates Steady Amid Ongoing Iran War Uncertainty

The European Central Bank (ECB) has kept interest rates unchanged at its meeting on Thursday. The bank's benchmark deposit rate remains at 2.25 percent, while its main refinancing and marginal lending rates are still at 2.40 percent and 2.65 percent, respectively.

The ECB cited uncertainty over the Iran War's impact on energy markets as a reason for holding off on any changes to interest rates. The bank noted that energy prices remain volatile and consistently elevated compared to pre-war conditions, with Brent crude oil hitting $100 a barrel after the resumption of hostilities in the Middle East earlier this month.

The ECB is closely monitoring the intensity and duration of the energy shock, as well as its indirect and second-round effects. Inflation in the Eurozone dipped slightly to 2.8 percent in June, down from 3.2 percent in May, but still above the bank's target rate of 2 percent.