The Federal Reserve just held interest rates steady -- and the European Central Bank is likely to follow suit, even though higher energy costs remain a worry for policymakers.
The ECB is widely expected to keep its key deposit rate unchanged at 2.5% on Thursday. It hiked borrowing costs by a quarter-point in September, citing the run-up in oil and natural-gas prices.
Frankfurt is likely to hold this time around, even though higher energy costs have pushed up inflation. Euro zone consumer prices rose 3.8% in September, the highest rate in three years.
Still, the ECB may be reluctant to tighten due to France's deepening debt troubles. The yield on the 10-year French government bond yield topped 5% for the first time in more than two decades last week.
Higher yields could help do the central bank's job by driving up the cost of borrowing for households and businesses. That, in turn, could help rein in inflation.
"While the energy backdrop has become more difficult since September, policymakers dialed back the sense of urgency following the rise in sovereign yields," said Henry Cook, an economist at MUFG Bank.
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