At today’s meeting, the Governing Council of the European Central Bank (ECB) announced that the key ECB interest rates are unchanged with the interest rates on main refinancing operations, marginal lending facility and the deposit facility at 0.00%, 0.25% and -0.40% respectively. The rates are expected to remain at their present levels at least through the summer of 2019, and for as long as necessary in order to converge inflation levels to around 2 per cent over the medium term. Monthly asset purchases will at the new pace of €15 billion per month until the end of December 2018, after which net purchases will end.  

Euro area real GDP grew 0.4 per cent in both the first and second quarters of 2018. The latest economic indicators, although somewhat weaker than expected, are consistent with ongoing broad based growth of the euro area economy. Private consumption is supported by ongoing employment gains and rising wages. Business investment is being supported by solid domestic demand, favourable financing conditions and corporate profitability. Expansion in the global economy is expected to continue supporting euro area exports, though at a slower pace. 

Euro area inflation was 2.1 per cent in September, up from 2.0 per cent in August. Given oil future prices, headline inflation is likely to remain around the current level over the coming months. Measures of underlying inflation remain generally low, but domestic cost pressures are strengthening with high levels of capacity utilization and tight labour markets. Underlying inflation is expected to pick up towards the end of the year and to increase further over the medium term. 

Sources:
European Central Bank