European Central Bank, Bank of England hold rates as war clouds outlook

Frankfurt | London: The European Central Bank and the Bank of England kept interest rates unchanged on Thursday, warning that the Iran war is clouding the outlook for inflation and growth as energy prices surge.

The ECB held its key deposit rate at 2%, saying the conflict in the West Asia would "have a material impact on near-term inflation" through higher oil and gas prices.

The eurozone, heavily reliant on imported energy, faces rising risks that higher fuel costs could both push up consumer prices and dampen economic activity. The ECB said it would continue to monitor the impact on inflation and growth before taking further action.


The Bank of England also left its benchmark rate unchanged at 3.75%, with all nine policymakers voting to hold - the first unanimous decision since September 2021.