It could well be a "long time" before the European Central Bank cuts interest rates. 

Yesterday, the ECB announced a freeze in interest rates, suggesting nearly a year of increases has come to an end. 

Despite this, inflation across the eurozone was recorded at 4.3% last month - notably higher than the bank’s target of 2%. 

“The reality is the ECB is still suggesting it’s concerned about inflation, that it feels it’s too high and will remain too high for too long,” economist Austin Hughes said. 

“So, while there’s a warning there that rates could go up again, I think the more significant message is they don’t plan to cut interest rates anytime soon.” 

Ireland’s Central Bank has forecast inflation will average out at 5.4% this year, 3.2% in 2024 and fall further the year after to 2.3%. 

Mr Hughes said with inflation predicted to fall, high interest rates could end up damaging the eurozone’s economy. 

“The bad news is that they [the ECB] are not ruling out a further interest rate increase and they’re hinting that it will be a long time before rates are cut,” Mr Hughes said. 

“I think that’s a mistake from the European Central Bank, I think rates will have to come down in the first half of next year because already we’re seeing signs of weakness in the Euro area economy.” 

Last month, ECB President Christine Lagarde said interest rates would remain high “as long as necessary” to bring inflation under control.

Main image: The European Central Bank (ECB) in Frankfurt, Germany in July 2017. Picture by: Noppasin Wongchum / Alamy Stock Photo