ECB says ultra-low rate benchmarks to remain in force

People look at EU flags hanging at half-staff, to pay respect to victims of the recent floods in Europe, outside EU headquarters in Brussels, Tuesday, July 20, 2021. Belgium is holding a day of mourning on Tuesday to show respect to the victims of the devastating flooding last week, when massive rains turned streets in eastern Europe into deadly torrents of water, mud and flotsam. (AP Photo/Virginia Mayo)

FRANKFURT, Germany (AP) — Facing unease over the spread of a more-contagious variant of the coronavirus, the European Central Bank said it would maintain its stimulus in the form of ultra-low interest rates until inflation “durably” reaches its 2% target.

The ECB said it would not back off its efforts to support the economy even if that resulted in a “transitory” period of inflation moderately above target.

The bank’s policy meeting Thursday was the first to employ the bank’s new monetary policy strategy that analysts say would permit the bank to employ stimulus for longer periods. The strategy abandoned the bank’s old inflation target of “close to but below” 2% in favor of a “symmetric” 2% target that allows for extended stimulus in times of trouble — even if that means briefly overshooting the inflation target.

The bank otherwise left its key rates and stimulus programs unchanged.