The Governing Council of the European Central Bank (ECB) kept its three key interest rates unchanged on 23 July 2026, leaving the deposit facility rate at 2.25%, the main refinancing operations rate at 2.40% and the marginal lending facility rate at 2.65%, as the outlook for energy prices remains highly volatile but currently close to the baseline of the June Eurosystem staff projections, with uncertainty still high and the full inflationary impact of the energy shock yet to play out. After holding rates at 2.00%, 2.15% and 2.40% in March and April, the ECB raised them by 25 basis points in June to the current levels. The Asset Purchase Programme and Pandemic Emergency Purchase Programme portfolios will continue to decline at a measured and predictable pace as the Eurosystem no longer reinvests principal from maturing securities. In the June baseline, headline inflation was projected to average 3.0% in 2026, 2.3% in 2027 and 2.0% in 2028, while economic growth was seen at 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028. The ECB said energy prices remain well above levels recorded before the conflict in the Middle East and said it is closely monitoring the intensity and duration of the shock, including indirect and second-round effects. It reiterated that policy will remain data-dependent and decided meeting by meeting, with no pre-commitment to a particular rate path, while standing ready to adjust all instruments within its mandate and noting that the Transmission Protection Ins
European Central Bank2026-07-23
European Central Bank Keeps Key Interest Rates Unchanged
The Governing Council of the European Central Bank left its three key interest rates unchanged on 23 July 2026, keeping the deposit facility rate at 2.25%, the main refinancing operations rate at 2.40% and the marginal lending facility rate at 2.65%, citing highly volatile but currently broadly in line energy price developments, elevated uncertainty and incomplete pass-through from the energy shock. It said the Asset Purchase Programme and Pandemic Emergency Purchase Programme portfolios will continue to decline without reinvestments, while reiterating a data-dependent, meeting-by-meeting approach with no pre-commitment on rates and the Transmission Protection Instrument remaining available.