- Decision
- Maintain
- Rate change
- 0 bps
- deposit facility rate
- 2%
The European Central Bank’s Governing Council left the deposit facility, main refinancing and marginal lending rates unchanged at 2.00%, 2.15% and 2.40% respectively, judging that inflation remains “close” to the 2% medium-term target while economic growth persists thanks to a robust labour market, solid private-sector balance sheets and support from earlier easing, even as global trade disputes and heightened geopolitical tensions keep the outlook uncertain. Following four consecutive 25-bp cuts between January and June that brought the deposit rate down from 2.75% to 2.00%, rates have now been on hold for three meetings. The Eurosystem continues to run down its Asset Purchase Programme and Pandemic Emergency Purchase Programme by ceasing reinvestments, and the Governing Council reiterated that future moves will be decided on a data-dependent, meeting-by-meeting basis without pre-committing to a specific path, while affirming its readiness to use all instruments, including the Transmission Protection Instrument, to secure medium-term price stability and safeguard monetary policy transmission.
Rate evolution
From June 2025 to April 2026, the European Central Bank cut the deposit facility rate by 25 basis points to 2.00% in June and then held it unchanged, with the easing based on a better inflation outlook, moderating underlying inflation and wage growth, and effective monetary transmission, as inflation was around target and worries that trade tensions would tighten financing conditions had eased. Later holds reflected inflation staying at or near 2%, easing domestic price pressures and labour costs, anchored longer-term inflation expectations, and an economy that remained resilient thanks to the labour market, solid private sector balance sheets, easier financing conditions and, by December, stronger domestic demand, even as trade disputes, geopolitics and the stronger euro kept uncertainty elevated.
In subsequent decisions, the Governing Council again left rates unchanged but warned that the war in the Middle East had sharply raised energy prices, intensifying upside risks to inflation and downside risks to growth, before raising the three key ECB interest rates by 25 basis points on 11 June 2026, lifting the deposit facility rate to 2.25% as it judged that the war was generating inflation pressures. On 23 July 2026, it held the deposit facility rate at 2.25% and said energy prices remained highly volatile and well above pre-conflict levels, uncertainty was high and the full inflationary impact of the shock had yet to play out, while reiterating its data-dependent, meeting-by-meeting approach with no pre-committed rate path. On 10 September 2026, the Governing Council raised the three key ECB interest rates by a further 25 basis points, taking the deposit facility rate to 2.50% with effect from 16 September, as the conflict continued to generate inflation pressures and inflation was set to remain well above target for an extended period. New European Central Bank staff projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, with the 2027 and 2028 forecasts revised up from June, while the Governing Council said risks remained tilted to the upside for inflation and to the downside for growth and retained its data-dependent, meeting-by-meeting approach.