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 saying inflation needs to fall more before the central bank can be confident enough to cut rates. Stock markets are soaring on hopes that the ECB and the U.S. Federal Reserve will be cutting borrowing costs soon. But Lagarde says 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. Markets have predicted as early as April but Lagarde offered no specific timetable; analysts think rate cut could come in June.