The European Central Bank left interest rates unchanged on Thursday as the eurozone’s weak economic outlook failed to convince the ECB’s board that price pressures (especially in the services sector) would end.

At its meeting on Thursday, the ECB kept the key rate at 4% but lowered its forecast for inflation this year from 2.7% to 2.3%, opening the door for a possible rate cut in the coming months.

The central bank also cut its growth forecast for 2024, saying it expected eurozone gross domestic product to grow by just 0.6% this year, down from a previous estimate of 0.8%.

Despite the economic slowdown, the ECB’s top economists fear that wage dynamics could keep inflation above the ECB’s 2% target, especially in the labor-intensive services sector.

The ECB expects core inflation, excluding energy and food prices, to be 2.6% this year, slightly below its previous forecast of 2.7%.

“The Governing Council is committed to ensuring a timely return of inflation to its medium-term target of 2%. Based on its current assessment, the Governing Council believes that the ECB’s key interest rates are at levels that, if maintained for a sufficiently long period, will contribute significantly to achieving this objective. Future decisions by the Governing Council will ensure that monetary policy rates are set at sufficiently restrictive levels for as long as necessary,” the ECB said in a statement.