The interest rate on the main refinancing operations and the rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25 per cent, 4.50 per cent and 3.75 per cent respectively.

While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.

In line with expectations, the inflationary impact of high wage growth has been buffered by profits. Monetary policy is keeping financing conditions restrictive, an official release said.

At the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year, it noted.

The ECB is determined to ensure inflation timely returns to its 2-per cent medium-term target and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim.

Fibre2Fashion News Desk (DS)