Britain and Europe followed the US in keeping interest rates unchanged

The British and European Central Banks on December 14 simultaneously did not adjust interest rates to continue controlling inflation.

The European Central Bank (ECB) on December 14 for the second time in a row kept interest rates unchanged at a record high of 4%. The agency also lowered its growth forecast for the region and announced plans to reduce the size of its balance sheet.

The ECB's decision was predicted in advance, due to a sharp decline in inflation in the euro area. Average inflation this year is estimated at 5.4%, lower than the previous forecast.

The agency also lowered the eurozone's GDP growth forecast from 0.7% to 0.6% this year. Growth next year may decrease from 1% to 0.8%.

The ECB warns that price pressure in the region will still increase, mainly because of labor costs. Core inflation (excluding fuel and food prices) has averaged about 5% this year.

"Going forward, we will still ensure reference interest rates are maintained at an appropriate level of tightening, for as long as necessary," the ECB announcement said.

According to the ECB, tight financial conditions will restrain demand and inflation. Growth will come under pressure in the short term, before recovering thanks to income growth and external demand.

In October, the European Central Bank stopped raising interest rates for the first time in 15 months, as the economic slowdown showed signs of becoming more serious. ECB will start raising interest rates from July 2022. After 10 consecutive increases, inflation has dropped sharply from its peak of 10.6% last year.

On the same day, the Bank of England (BoE) also kept the reference interest rate unchanged at 5.25%. They affirmed that monetary policy "needs to be tightened for a while longer". This is the third consecutive time BoE has not adjusted interest rates.

Inflation in the UK was 4.6% in October. This is the lowest level in two years, but still higher than the BoE's 2% target.

The country's central bank has raised interest rates 14 times in a row, bringing interest rates from 0.1% in 2021 to the current 5.25%.

The move by the ECB and BoE was made just one day after a similar decision by the US Federal Reserve (Fed) . Reference interest rates in the US for the third consecutive time were maintained at a 22-year high, at 5.25-5.5%.