1255 GMT - The European Central Bank kept its key interest rate at 2.25% as expected, after June's inflation data provided some relief, Schroders economist Tina Fong says. However, the decline in inflation to 2.8% from 3.2% in May wasn't enough for policymakers to declare victory, she says. "Inflation remains above the ECB's 2% target and the central bank's recent rhetoric has been relatively hawkish." In addition, the renewed flare-up in the Middle East has pushed oil prices back up, the eurozone economy has proved surprisingly resilient and Germany's fiscal stimulus package should provide an additional tailwind to growth over the coming months, she says. Taken together, the ECB should raise rates by a quarter-point in September, she says. (edward.frankl@wsj.com)

(END) Dow Jones Newswires

July 23, 2026 08:55 ET (12:55 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.