ECB leaves interest rate unchanged

The European Central Bank’s Governing Council has decided to maintain three key interest rates unchanged due to a decline in inflation since January’s last meeting. The latest projections show inflation to average 2.3% in 2024, 2.0% in 2025, and 1.9% in 2026, with inflation excluding energy and food also revised down to 2.6%.

Domestic price pressures remain high due to strong wage growth, and financing conditions are restrictive. The Governing Council is determined to ensure inflation returns to its 2% medium-term target in a timely manner, and believes key ECB interest rates are at levels that will contribute significantly to this goal. Future decisions will ensure policy rates are set at sufficiently restrictive levels for as long as necessary.

The Council will continue to use a data-dependent approach to determine the appropriate level and duration of restriction, based on its assessment of the inflation outlook, economic and financial data, underlying inflation dynamics, and monetary policy transmission strength.