ECB holds key rate at 4%

The European Central Bank keeps its leading interest rate steady at four percent. Despite this, Danske Bank’s chief economist, Las Olsen, suggests the potential for up to three quarter-point rate reductions this year based on ECB’s communications. Danish mortgage borrowers aren’t expected to see rate relief soon, especially with recent trends in the US. The short-term rates may decline later in the year in anticipation of ECB cuts. In response to inflation, the ECB has increased rates by a total of 4.5 percent since the summer of 2022, aiming for a two percent inflation target. The current inflation rate in the eurozone stands at 2.4 percent. Allan Sørensen, chief economist at Danish Industry, notes that pivotal inflation reports due in April and May will critically influence the ECB’s decisions at the June meeting.