The European Central Bank (ECB) has maintained its current interest rate, extending a period of pause and leaving the benchmark rate at 2.0 percent. The decision was announced Thursday following a meeting of the Governing Council in Frankfurt.
The rate on the deposit facility, as well as the rates for the main refinancing operations and the marginal lending facility, will also remain unchanged at 2.00 percent, 2.15 percent and 2.40 percent, respectively.
The ECB cited inflation currently being close to its medium-term target of 2 percent and stated that the Council’s assessment of inflation outlook remains largely unchanged. According to new Eurosystem projection scenarios, average overall inflation is forecast at 2.1 percent for 2025, 1.7 percent for 2026 and 1.9 percent for 2027. Excluding energy and food, inflation is projected to average 2.4 percent in 2025, 1.9 percent in 2026 and 1.8 percent in 2027.
Economic growth is now projected at 1.2 percent for 2025, a revision upwards from the 0.9 percent growth anticipated in June projections. Growth projections for 2026 are slightly lower at 1.0 percent, while the 2027 forecast remains unchanged at 1.3 percent.
The ECB Council reaffirmed its commitment to ensuring inflation stabilizes at 2 percent in the medium term. Monetary policy decisions will be data-dependent and reviewed at each meeting. The Council emphasized its decisions will be based on inflation outlook and associated risks, factoring in current economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. The ECB stated it will not pre-commit to a specific interest rate path.
