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European Central Bank Holds Interest Rates Steady
(MENAFN) On Thursday, the European Central Bank (ECB) announced that it would maintain its three principal interest rates unchanged, aligning with market expectations.
The deposit rate remains at 2%, marking its lowest point since November 2022. Meanwhile, the rates for main refinancing operations and the marginal lending facility stand at 2.15% and 2.40%, respectively.
This decision represents the fourth consecutive pause in rate adjustments. The last reduction occurred in June, concluding an eight-step cutting cycle that began when the ECB initiated its easing strategy in June 2024.
The institution reaffirmed that inflation is projected to stabilize around its 2% target over the medium term. "The 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," the bank said.
For inflation excluding energy and food, the central bank anticipates averages of 2.4% in 2025, 2.2% in 2026, 1.9% in 2027, and 2.0% in 2028. "Inflation has been revised up for 2026, mainly because staff now expect services inflation to decline more slowly," the ECB noted.
"Economic growth is expected to be stronger than in the September projections, driven especially by domestic demand," it added.
The deposit rate remains at 2%, marking its lowest point since November 2022. Meanwhile, the rates for main refinancing operations and the marginal lending facility stand at 2.15% and 2.40%, respectively.
This decision represents the fourth consecutive pause in rate adjustments. The last reduction occurred in June, concluding an eight-step cutting cycle that began when the ECB initiated its easing strategy in June 2024.
The institution reaffirmed that inflation is projected to stabilize around its 2% target over the medium term. "The 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," the bank said.
For inflation excluding energy and food, the central bank anticipates averages of 2.4% in 2025, 2.2% in 2026, 1.9% in 2027, and 2.0% in 2028. "Inflation has been revised up for 2026, mainly because staff now expect services inflation to decline more slowly," the ECB noted.
"Economic growth is expected to be stronger than in the September projections, driven especially by domestic demand," it added.
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