Europe set to hold rates with ECB, BOE following the Fed. Weak dollar’s a factor
Subscribe to enjoy similar stories. Europe’s most important central banks are likely to hold interest rates steady on Thursday. Just like the Federal Reserve, policymakers across the Atlantic are in wait-and-see mode.
The Bank of England is widely expected to maintain rates of 3.75% when it makes its latest policy decision at 7 a.m. Eastern time, having lowered them by a quarter of a point in December. Investors are all-but-certain the European Central Bank will keep borrowing costs at 2% when it announces its own decision an hour and 15 minutes later.
It would be the fifth meeting in a row it has left them unchanged. The monetary-policy moves come just a week after the Fed voted to keep its target for the federal-funds rate at 3.5% to 3.75%, following three straight quarter-point cuts. The ECB is probably in the best place of the three central banks.
Euro zone inflation dropped below 2% last month and is expected to remain under that mark for the next two years. While Frankfurt believes it is in a “good place," the euro has appreciated against the dollar this year as part of the so-called Sell America trade. That means there’s a chance inflation could continue to fall, because weakness in the greenback makes imports cheaper and exports less competitive at a point when President Donald Trump’s sweeping tariffs are already upending global trade.
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