Frozen interest rates hurt working people and von der Leyen's investment plans

The European Central Bank has today announced interest rates will remain unchanged despite the fact that it says "most measures [of underlying inflation] were either stable or edged down in June."

Responding to the decision, ETUC General Secretary Esther Lynch said:

"Today's decision shows the ECB has no clear strategy of how to deal with profit-driven inflation.

"After a small cut in record-level interest rates last month, it has now decided to freeze rates despite the fact its own data says inflationary pressures are receding.

"It is not enough to relieve the financial pressure on working people who increasingly depend on credit for everyday purchases or to incentivise desperately-needed investment in the transition to a green and digital economy.

"The ECB has a responsibility to support the EU's policy objectives and Ursula von der Leyen said today she wants to 'turbo charge investment'. Maintaining high interest rates hinders this objective and goes against the EU Strategic Agenda's specific objective to enhance investment to preserve and create jobs.

"High interest rates as an answer to profit-driven inflation has been discredited by a European Parliament study as a 'costly and ineffective' strategy that hits workers and prevents climate action.

"The ECB should limit the damage of that strategy by cutting rates as quickly as possible."