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STORY: The European Central Bank kept interest rates unchanged as expected on Thursday.

And it gave no hints about its next move.

The ECB has said domestic price pressures remain high and inflation will be above its target well into next year.

ECB President Christine Lagarde.

"The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim."

The ECB cut rates from record highs last month.

But it was a move even some of its policymakers thought was rushed after progress on lowering inflation to 2% stalled.

Some analysts believe the bank will likely be more cautious about a follow-up step, due to persistently high inflation and issues around wage growth.

The ECB came out with a balanced message following Thursday's meeting.

It argued corporate profits were absorbing some price pressures.

But the bank said risks remained and further evidence was needed before policymakers could cut rates again.

"Domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year."

The ECB repeated it will not precommit to any particular rate path and incoming data would guide its future decisions.

The focus now shifts to the bank's September meeting, with scores of economic data due out before then.

Markets have priced in almost two rate cuts over the rest of the year.

While investors also project a little more than five moves by the end of next year.