European Central Bank keeps 3 key interest rates unchanged

The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will remain unchanged at 2 per cent, 2.15 per cent and 2.4 per cent respectively.

The rate for the deposit facility—the main tool to influence monetary policy—has hovered at 2 per cent, its lowest level in more than two years, since June, when the central bank cut it by 25 basis points. It was then left unchanged at the July meeting.

Inflation is now at around the 2-per cent medium-term target and the ECB governing council’s assessment of the inflation outlook remains broadly unchanged, an ECB release said.

This was the first monetary policy meeting after the European Union (EU) and the United States signed a trade agreement.

The new ECB staff projections present a picture of inflation similar to that projected in June. They see headline inflation averaging 2.1 per cent in 2025, 1.7 per cent in 2026 and 1.9 per cent in 2027.

For inflation excluding energy and food, they expect an average of 2.4 per cent in 2025, 1.9 per cent in 2026 and 1.8 per cent in 2027.

The economy is projected to grow by 1.2 per cent in 2025, revised up from the 0.9 per cent expected in June. The growth projection for 2026 is now slightly lower, at 1 per cent, while the projection for 2027 is unchanged at 1.3 per cent.

ALCHEMPro News Desk (DS)