Europe's Top Central Banks Freeze Rates as Iran War Sends Inflation Outlook Soaring

Four of Europe's most powerful central banks, the European Central Bank, Bank of England, Sweden's Riksbank, and Switzerland's National Bank, all held interest rates steady Thursday, citing the Iran war as a severe new threat to the global economy. Before the conflict erupted in late February, European banks had been on track for stable or falling rates, with the ECB eyeing eurozone inflation at 1.9% in February, near its 2% target. The ECB has now revised its headline inflation forecast upward to 2.6% for 2026, 2% for 2027, and 2.1% for 2028, blaming rising energy prices driven by the war. The Bank of England unanimously held its benchmark rate at 3.75%, Sweden's Riksbank held at 1.75%, warning of uncertainty, while Switzerland's SNB kept its rate at 0.00% and signaled a heightened readiness to intervene in currency markets to prevent an excessive appreciation of the Swiss franc that could destabilize prices.