ECB leaves interest rates unchanged at 2%
The main refinancing rate remains at 2.15%, the marginal lending rate at 2.40%. Growth estimate for the euro area in 2025 improved to 1.4%
The European Central Bank, at its meeting in Frankfurt, left the deposit rate unchanged at 2%. The main refinancing rate remains at 2.15 per cent, the marginal lending rate at 2.40 per cent. This was announced by the ECB, which kept rates at the 2% level reached last June, after having cut them by two percentage points in eight cuts in one year.
The latest Eurosystem projections "point to overall inflation averaging 2.1 per cent in 2025, 1.9 per cent in 2026, 1.8 per cent in 2027 and 2.0 per cent in 2028," the ECB explains. Inflation net of the energy and food component would average 2.4% in 2025, 2.2% in 2026, 1.9% in 2027 and 2.0% in 2028.
Inflation was revised upwards for 2026, mainly because experts now expect services inflation to fall more slowly. "The Governing Council is determined to ensure that inflation stabilises at the 2% target over the medium term. To define the appropriate monetary policy stance, the Governing Council will follow a data-driven approach whereby decisions are taken on a case-by-case basis at each meeting," reads the ECB statement. In particular, the Governing Council's decisions on interest rates will be based on "an assessment of the inflation outlook and associated risks, taking into account new economic and financial data, as well as the dynamics of core inflation and the strength of the monetary policy transmission, without committing to a particular interest rate path".
"The unanimous decision on rates today is also about keeping all options on the table. There is no set path for rates and no set date for a move" on monetary policy, clarified ECB President Christine Lagarde at the customary press conference after the Governing Council meeting.
Growth estimates for the euro area at 1.4% in 2025
The European Central Bank, at its meeting in Frankfurt, improved its growth estimate for the euro area in 2025 to 1.4 per cent from 1.2 per cent three months ago. The growth forecast for 2026 is raised to 1.2 per cent from 1 per cent and that for 2027 to 1.4 per cent from 1.3 per cent. "Economic growth is expected to be stronger than projected in September, driven in particular by domestic demand," the ECB explained in its statement.
