ECB Keeps Interest Rates Unchanged Amid Iran War Energy Inflation

The European Central Bank left its key interest rates unchanged on Thursday, holding the deposit rate steady as policymakers weighed a sharp rise in energy costs stemming from the war against Iran. The Governing Council's decision matched market expectations after months of relative stability in borrowing costs across the eurozone.

ECB officials said they were "closely monitoring" the energy price shock, which has pushed headline inflation above the bank's target in recent weeks. Rising oil and gas prices tied to the conflict have filtered through to consumer costs, complicating the central bank's efforts to keep price growth anchored near its 2% goal.

Analysts said the ECB is likely to hold rates steady at upcoming meetings unless energy prices ease or inflation accelerates further. The bank's next policy meeting will offer fresh guidance on how persistent the Iran-linked price pressures are expected to be, with markets watching closely for any shift in tone.