ECB stand pat, committed to lowering inflation to 2.0%

Rate-setters in Frankfurt stayed put on policy at their latest policy meeting, but reiterated their determination to return inflation to 2.0% in timely fashion.

In their policy statement, they said that: "Based on its current assessment, the Governing Council considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal.

"The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary."

All of the ECB's policy rates, those for the main refinancing operations, on the marginal lending facility and the deposit facility were unchanged, at 4.5%, 4.75% and 4.0%, respectively.

Although Thursday's decision had been widely anticipated, investors were keen for any clues as to the timing of the anticipated interest rate reductions over the course of 2024.

Hence the interest in ECB chief Christie Lagarde's press conference at 1345 GMT.

Immediately following the release of the ECB policy statement, Pantheon Macroeconomics's Claus Vistesen was telling clients: "Clearly, the ECB is not happy with the idea of rate cuts in March or April. And based on the information it has today, it can comfortably maintain its position that market-based expectations remain too optimistic.

"It will be interesting in this respect to see whether Ms. Lagarde repeats her comment from Davos that a summer rate cut is a possibility. This is to say, for all the hawkishness, the ECB is happy to underwrite what is now the consensus position of a first rate cut in June."