European Central Bank leaves key interest rate at a record high as focus turns to timing of cuts

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — The European Central Bank has kept interest rates unchanged. ECB boss Christine Lagarde is expected to send a message to financial markets on Thursday to cool it with expectations for rapid rate cuts. Stock markets are soaring on hopes that the ECB and the U.S. Federal Reserve will be cutting borrowing costs soon. But Lagarde has said bank officials need to ensure inflation is firmly under control first. That’s the reason the ECB raised its key rate to a record 4% in the first place. Thursday’s meeting will be closely watched for clues about when the first rate cut could come. Lagarde has indicated this summer, while markets have predicted as early as April.