On January 25, local time, the European Central Bank (European Central Bank) held a monetary policy meeting and decided to keep the three key interest rates unchanged.。The ECB announced on the same day that the main refinancing rate, the marginal lending rate and the deposit facility rate will remain at 4.50%, 4.75% and 4.00% unchanged。

Spurred by news, Stoxx Europe 600 index closes up 0.3%, the FTSE 100 is flat, while the DAX and CAC 40 are up 0.1%, the Dow also rose 0.3%。Brent crude up 1.9%, to 81 per barrel.$14, boosting oil stocks。

ECB reiterates it will keep interest rates high "long enough" to keep inflation on target。

December inflation rises Lagarde slams market expectations for rapid rate cuts

The central bank left interest rates unchanged for the third consecutive meeting after raising the benchmark deposit rate to 4% in September。The central bank said the recent data and the medium-term inflation outlook confirmed by the previous switch were largely consistent, and the downward trend in inflation continued.。

However, according to preliminary statistics released by Eurostat on the 5th, the euro zone inflation rate in December last year was 2.9%, up from 2 in November.4%, ending months of downtrend。

In response, ECB Governor Christine Lagarde (Christine Lagarde) said at a press conference that the rebound in inflation in December was expected, caused by the base effect, this change "does not affect our view that the deflationary process is working."。

However, Lagarde also said that the consensus of the central bank board is that at the current point in time "it is too early to discuss interest rate cuts," she further pointed out that the central bank to make monetary policy is based on economic data, rather than the so-called calendar (fixed on any calendar)。

Subsequently, the ECB said in a statement that the Governing Council's "future decisions will ensure that its policy rate will be set at a sufficiently strict level for as long as necessary," in line with the ECB's previous wording.。

Currently, the ECB is facing a downturn in the eurozone economy and fragile financial stability。The euro zone's private sector economic activity suffered a "black door" in January, with the initial Markit composite PMI rising slightly to 47 in January..9, still below economists' forecasts of 48, in contraction territory for the eighth consecutive month。Germany's January PMI data remained bleak overall, with an initial composite PMI of 47.1。Similarly, France has had a very difficult start to the year, with an initial composite PMI of 44.2。

ECB eyes wage growth, reiterates its reluctance to start cutting interest rates

For this policy action, analysts believe that the ECB has good reason to be cautious。First, according to December data, there is a risk that inflation in the eurozone will rise again.。In the event of an accident, the ECB would have to sacrifice economic activity to raise interest rates, which would only prolong the pain of the credit crunch.。

On the other hand, the rate of wage increases for European workers is also highly concerned by the ECB。ECB officials say they want to see wage growth figures for the first few months of the year before deciding what they see as the direction of inflation.。

Echoing officials on the issue at this rate decision press conference, ECB President Christine Lagarde said the ECB was taking a closer look at a range of data on wage growth, including from jobs website Indeed and her own wage negotiation tracker。

Lagarde also said that the coming months would be "informative" in this regard, adding that wage growth was currently "in a good direction."。She said the ECB wants any further wage growth to be absorbed by corporate profits so there is no second-round inflationary effect。

Richard Carter, head of fixed-rate research at Quilter Cheviot, said in a note that the announcement meant the ECB "reiterated its unwillingness to begin cutting interest rates, despite growing pressure to do so."。He also said inflation in the euro zone had been falling steadily, but there had been an unexpected uptick in December, to 2..9%, adding fuel to the ECB's relatively hawkish stance。

For his part, Vincent Chaigneau, head of research at Generali Investments, noted that the ECB had kept its language on monetary policy sufficiently strict for long enough, and that removing it would be seen as dovish.。

Shenio stressed: "I think the slightly positive point from the market's point of view is that the perception of domestic inflationary pressures seems to have lowered a notch.。They no longer talk about rising domestic inflationary pressures。He added: "Of course, this also reflects the rapid decline in inflation.。So it's not very surprising。"