Why did the ‘European’ keep interest rates unchanged?

July 23, 2026 - 17:23 | Last updated July 23, 2026 - 17:23

The European Central Bank announced fixing the main interest rate at 2.25%. (Traded).

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Okaz (Brussels)

The European Central Bank kept key interest rates unchanged, amid continued risks of worsening inflationary pressures due to rising energy prices as a result of the war in the Middle East.

The bank announced at its meeting (Thursday) fixing the main interest rate at 2.25%, in line with expectations, noting that the full impact of the energy price shock on inflation is not yet clear.

Oil implications

The bank clarified in its statement issued today that it is closely monitoring the repercussions of oil prices, affirming its commitment to returning inflation to its target of 2% over the medium term.

The central bank added that it will not pre-commit to a specific path for interest rates, indicating that its future decisions will depend on its assessment of inflation expectations and the risks surrounding them.

The target level

In the United States, the debate over the path of monetary policy was renewed after statements by several US Federal Reserve officials, with increasing indications of growing support for maintaining a hawkish stance against inflation, despite market expectations that the central bank will keep interest rates unchanged at its meeting scheduled for July 28-29.

Federal Reserve Chairman Kevin Warsh affirmed, during his testimony before the House Financial Services Committee, that the central bank 'will not tolerate' inflation, and that the battle to bring prices back to the target level is not over yet, reflecting the commitment to prioritizing price stability despite political pressures calling for rate cuts.

European Central Bank interest rates fixing