ECB holds deposit rate at 2% as eurozone inflation hits 3%; markets see 75% chance of June hike

The European Central Bank (ECB) kept its deposit rate unchanged at 2.00% on Thursday, while flagging growing unease over an energy-led inflation flare-up. Markets are now pricing a 75% probability of a rate increase in June, according to investingLive. Eurozone inflation rose to 3% in April, well above the ECB's 2% target, after the Iran war drove oil prices to a four-year high. In its statement, the ECB said "the upside risks to inflation and the downside risks to growth have intensified." The Governing Council warned that a prolonged conflict and persistently high energy costs could amplify broader price pressures through second-round effects on wages and core inflation.