We expect the European Central Bank to keep rates on hold this year. Elga Bartsch explains why.
We believe the European economy requires ongoing monetary policy support. Why? There was a marked slowdown in economic activity last year, and inflation remains subdued. Hence tighter financial conditions would pose a risk to the region’s growth, as we write in our Macro & market perspectives, "Slowing - but still growing."
The eurozone economy is more open than that of the U.S., and it felt last year’s deceleration in global trade growth more severely. See the