By
AP Business Writer
FRANKFURT, Germany (AP) — The European Central Bank left interest rates unchanged Thursday amid uncertainty about how volatile energy prices will affect inflation.The central bank for the 21 countries that use the euro currency left its benchmark rate unchanged at 2.25% following a quarter-point hike at its previous meeting June 11. That increase was aimed at dampening the impact on consumer prices from higher oil prices due to the US-Iran war and subsequent interruption of oil shipments through the Strait of Hormuz.Analysts say the bank may simply be taking a pause to gather more information amid swings in oil prices, which fell after announcement of a ceasefire but then rose again when the ceasefire agreement collapsed and fighting resumed. Economists are pointing toward the bank’s Sept. 10 meeting as a possibility for another rate increase.
“Uncertainty remains high and the full inflationary impact of the energy shock has yet to play out,” ECB President Christine Lagarde said at a post-decision news conference. “We are therefore closely monitoring the intensity and duration of the shock, as well as its indirect and second round effects”Lagarde said the bank is making decisions meeting by meeting based on incoming data and has not committed to any particular path for rates.
