FX.co ★ ECB Leaves Monetary Policy Unchanged

The European Central Bank (ECB) has decided to maintain its key interest rates at existing levels, holding the deposit facility at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%, in line with market expectations. Inflation remains near the medium-term target of 2%, with forecasts largely unchanged since June. According to new staff projections, headline inflation is predicted to average 2.1% in 2025, decrease to 1.7% in 2026, and slightly rise to 1.9% by 2027. Core inflation, excluding food and energy, is estimated to be 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027. Economic growth is anticipated at 1.2% in 2025, compared to a previous forecast of 0.9%, with a dip to 1.0% in 2026 and a rebound to 1.3% in 2027. The Governing Council reiterated its commitment to stabilize inflation at 2% over the medium term. This will involve a careful, data-informed approach for each meeting, ensuring that interest rate decisions will consider evolving inflation trends, potential risks, and the effectiveness of policy transmission, without committing to a predetermined course of action.