Report: The European Central Bank is expected to stand pat to avoid any surprises.

Fund manager Wolfgang Bauer stated in a report that the basic scenario for Royal London Asset Management is that the European Central Bank will maintain interest rates unchanged until the end of the year, indicating that recent market volatility may be somewhat exaggerated. The fund manager said, "Although the structurally higher prices of commodities are transforming into sustained price pressures and higher inflation rates, the broader macroeconomic implications are more subtle." "High energy costs and potential supply chain disruptions will also put pressure on economic growth, tightening financial conditions and suppressing demand. Bauer suggested that for a sustained tightening cycle to occur, the Eurozone may need to enter a deep-rooted stagflation environment. He said, "In our view, this remains a risk scenario rather than our core scenario."