The ECB Governing Council held a monetary policy meeting on 18-19 March 2026 in Frankfurt, reviewing economic developments, financial markets, and deciding to keep interest rates unchanged amid uncertain geopolitical and energy price shocks.
The European Central Bank’s Governing Council convened on 18-19 March 2026 in Frankfurt am Main to review recent financial, economic, and monetary developments. The meeting included an assessment of market reactions to geopolitical tensions and energy price increases resulting from the war in the Middle East.
Market developments showed increased volatility, with euro area equity prices, exchange rates, and bond markets reacting strongly to energy shocks. Inflation expectations rose sharply in the short term, driven by higher energy prices, but remained broadly anchored over the medium term.
Economic activity in the euro area continued to show resilience, with growth in the fourth quarter of 2025 at 0.2%, supported by domestic demand. However, the war and energy price shocks were expected to dampen growth and increase inflation in the near term.
In light of the uncertain outlook, the Governing Council decided to keep the three key ECB interest rates unchanged, emphasizing a data-dependent approach and maintaining flexibility to respond to evolving conditions. The Council highlighted the importance of close monitoring of inflation, financial conditions, and geopolitical developments.
The Governing Council also discussed the potential impact of the war on inflation and growth, emphasizing the use of scenario analysis to assess risks. It committed to regular updates of the scenario analysis and to communicate transparently about the risks and uncertainties.
The next monetary policy account is scheduled for release on 28 May 2026. The ECB remains committed to its medium-term inflation target of 2%, ready to act if necessary to ensure price stability.
