By Francesco Canepa and Balazs Koranyi

FRANKFURT (Reuters) – The European Central Bank was set to keep interest rates on hold on Thursday, pausing after seven straight cuts as it waited for the fog surrounding Europe’s trade relations with the United States to clear.

The ECB has halved its policy rate from 4% to 2% in the space of just one year after taming a surge in prices that followed the end of the COVID-19 pandemic and Russia’s invasion of Ukraine.

With inflation now back at its 2% goal and expected to stay there, euro zone central bankers were likely to stay put this week and observe what kind of tariffs President Donald Trump’s U.S. administration would impose on the European Union after an August 1 deadline for talks.

“The ECB is widely expected to keep policy on hold this wee

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