The European Central Bank’s Governing Council has kept key interest rates unchanged and updated its inflation and growth projections, emphasizing a data-dependent approach to monetary policy.
The Governing Council of the European Central Bank (ECB) decided today to keep the three key interest rates unchanged: the deposit facility at 2.00%, the main refinancing operations at 2.15%, and the marginal lending facility at 2.40%.
The updated assessment confirms that inflation is expected to stabilize at the 2% target in the medium term. New Eurosystem staff projections show headline inflation averaging 2.1% in 2025, 1.9% in 2026, 1.8% in 2027, and 2.0% in 2028. Excluding energy and food, inflation is projected at 2.4% in 2025, 2.2% in 2026, 1.9% in 2027, and 2.0% in 2028. Inflation has been revised upward for 2026 mainly due to slower expected decline in services inflation.
Economic growth is projected to be stronger than previously estimated, driven mainly by domestic demand. Growth forecasts are 1.4% in 2025, 1.2% in 2026, 1.4% in 2027, and 1.4% in 2028.
The Governing Council will follow a data-dependent, meeting-by-meeting approach to monetary policy decisions, assessing inflation outlook, risks, economic data, underlying inflation dynamics, and transmission strength. It is not committed to a specific rate path.
The asset purchase programmes (APP and PEPP) are declining at a measured pace, as the Eurosystem no longer reinvests principal payments from maturing securities.
The Governing Council remains ready to adjust all instruments within its mandate to ensure inflation stabilizes at 2% and to maintain effective monetary policy transmission. The Transmission Protection Instrument is available to counter disorderly market dynamics that threaten policy transmission across the euro area.
The ECB President will comment on these decisions at a press conference starting at 14:45 CET today.
