ECB maintains interest rates and updates inflation and growth outlook

The Governing Council of the European Central Bank (ECB) decided today to keep the three key interest rates unchanged. The rates are 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 expectations of slower decline in services inflation.

Economic growth is forecasted to be stronger than in previous projections, driven mainly by domestic demand. Growth estimates are 1.4% in 2025, 1.2% in 2026, 1.4% in 2027, and 1.4% in 2028. The Governing Council remains committed to a data-dependent approach, assessing inflation outlook and risks, without pre-committing 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 is prepared to adjust all instruments within its mandate to ensure inflation stabilizes at 2% and to maintain effective monetary policy transmission. The Transmission Protection Instrument remains available to counter disorderly market dynamics that threaten monetary policy transmission across the euro area.

The ECB President will comment on these decisions at a press conference starting at 14:45 CET today.