![Europe's central bank hits pause on rate cuts as inflation takes its sweet time to come down to 2%](https://cdn.newsserve.net/ONPglobe256.png)
Europe's central bank hits pause on rate cuts as inflation takes its sweet time to come down to 2%
Home buyers and businesses waiting for lower interest rates in Europe are going to have to wait a little longer as the European Central Bank takes its time to make sure stubborn inflation is firmly under control before lowering its benchmark rate again.
The ECB's stance for now resembles that that of the U.S. Federal Reserve, which is expected to hold off lowering rates at its next meeting July 30-31, though the Fed appears closer to cutting rates after that than is the ECB.
Economists say the Frankfurt-based central bank, which decides interest-rate policy and supervises banks in the 20 European Union member countries that use the euro currency, will likely leave its key rate unchanged at 3.75% when its officials meet Thursday in Frankfurt.
Analysts say the rate-setting council will leave a decision on lower rates for the September meeting, after an initial quarter-percentage point cut at the June 6 meeting.
Even the September meeting remains an open question, meaning people with tracker mortgages or wind-park developers trying to finance new turbines might not see any change in their loan costs until after the Oct. 17 meeting.
Analysts say ECB President Christine Lagarde is likely to repeat her message that the bank is sizing up the path of inflation based on the latest data on prices and wages and will decide rates meeting by meeting, rather than sketch out a downward path of regular rate cuts.
The ECB, Fed, Bank of England and other central banks around the developed world sharply raised rates to quell an outburst of inflation that followed Russia's invasion of Ukraine and the end of the pandemic.
Higher rates make it more expensive to borrow money, spend and invest, cooling off demand for goods and, historically, the upward trend for consumer prices.
Inflation...