ECB policymakers keep rate options open amid uncertain outlook

Group 1 - The European Central Bank (ECB) has left interest rates unchanged at 2%, having halved them from 4% over the past year, indicating a cautious approach towards future rate cuts amid uncertain economic conditions [1][2]. - Policymakers, including France's central bank governor, have suggested that further rate cuts are possible in upcoming meetings, emphasizing that there is no predetermined path for monetary policy [2][5]. - The ECB's latest projections indicate a decline in inflation from approximately 2% currently to 1.7% next year and 1.9% by 2027, influenced by factors such as cheaper energy and a stronger euro [3]. Group 2 - Risks to inflation include potential delays in the European Union's new carbon trading system, which could add 0.3 percentage points to inflation projections, as well as deflationary pressures from Chinese imports [4]. - The upcoming December meeting of the ECB is highlighted as a critical point for updating inflation projections and assessing whether inflation is deviating from the bank's 2% target [4]. - Money markets currently reflect a low likelihood of further rate cuts in the near term, with only a slight chance of reductions towards the summer of next year [5].