ECB leaves interest rates on hold amid stable inflation outlook

The European Central Bank on Thursday left interest rates on hold for a third meeting in a row stating its outlook for inflation is broadly unchanged.

The decision by the Frankfurt-based lender leaves the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility unchanged at 2.00%, 2.15% and 2.40% respectively.

The widely expected decision is the third hold in succession by the ECB, following similar outcomes in July and September. Prior to the hold in July, it had cut for seven meetings in a row.

In a statement, the ECB said inflation remains close to the 2% medium-term target and the Governing Council’s assessment of the inflation outlook is broadly unchanged.

The economy has continued to grow despite the challenging global environment while the "robust" labour market, solid private sector balance sheets and past interest rate cuts remain "important sources of resilience."

But the ECB stressed the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions.

Looking ahead, the ECB pledged to follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.

"In particular, the Governing Council's interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path," it added.