(Il Sole 24 Ore Radiocor) - Milano, 19 mar - European shares closed sharply lower as central banks around the world left interest rates unchanged amid rising uncertainty tied to the ongoing conflict in the Middle East.

The European Central Bank became the seventh central bank to announce unchanged rates in the last 24 hours.

Speaking after the policy decision central bank head Christine Lagarde mostly confirmed market expectations that the ECB will likely increase rates twice by the end of 2026 amid renewed inflationary pressure.

Eurozone government bond yields remained higher after the ECB's decision.

The ECB's decision comes after the Federal Reserve yesterday kept interest rates on hold and hiked its inflation forecasts. While the US central bank signalled one rate cut might be possible this year, bets are now rising that the Fed will hold steady amid growing concerns over inflationary pressure from the war.

The London FTSE 100 closed down 2.35% at 10,043.50 points, the Frankfurt DAX fell 2.74% at 22,859.41 points, the Paris CAC 40 dropped 2.02% at 7,807.87 points, while in Milan the FTSE MIB lost 2.32% at 43,701.38 points, and in Madrid the.

IBEX 35 closed 2.38% lower at 16,886.67 points.

(RADIOCOR) 19-03-26 18:02:52 (0676) 5 NNNN