The European Central Bank remains vague on when interest rates will come down

President of European Central Bank Christine Lagarde. Pic: AP Photo/Michael Probst, File

The European Central Bank gave no clear indication on when it will cut interest rates after it introduced successive hikes to drive down inflation. 

It said it is determined to ensure that inflation returns to its 2% medium-term target "in a timely manner." 

The European regulator said that maintaining rates "for a sufficiently long duration, will make a substantial contribution to this goal."

"The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary," the ECB said. 

Markets on the other hand see two cuts by April and 155 basis points of easing in all of 2024, even though a host of conservative policymakers have tried to push back against those expectations in the run up to the December meeting.

There were no added hikes to interest rates, which stand at 4.5%, at the latest monetary policy meeting as inflation continues to fall in Ireland and in the eurozone.

Eurozone inflation fell to 2.4% recently while Irish inflation cooled to 3.9%. 

Ahead of a press conference later, the ECB signalled an early end to its last remaining bond purchase scheme, wrapping up a decade-long experiment in hoovering up debt across the 20-nation eurozone.

- Additional reporting by Reuters