European Central Bank holds interest rates steady for third meeting in a row

The European Central Bank on Thursday held interest rates unchanged, and reiterated it would keep them high for a “sufficiently long duration” to bring inflation to target.

The central bank is holding steady for the third straight meeting, after hiking its deposit rate to 4% in September.

It said that recent data had “broadly confirmed” its previous medium-term inflation outlook and that, despite energy effects, a declining trend in underlying inflation had continued.

“The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction,” the ECB said in a statement.

The central bank is facing a sluggish euro area economy and fragile financial stability, but it is also focused on bringing inflation down to 2% from 2.9% currently. The ECB is highly concerned with cutting rates too soon and undoing some of the effects of the existing tightening.

Some ECB officials have spent the month pushing back against market expectations for rate cuts in the spring, stressing the need to wait for first-quarter wage data. On Thursday morning, markets were factoring in a 62% probability of an April cut, according to LSEG data.

This is a breaking news story and will be updated shortly.