European Central Bank holds rates steady at 2%, matching expectations
- Central bank says outlook still uncertain, mostly due to ongoing global trade disputes, geopolitical tensions
ISTANBUL
The European Central Bank (ECB) on Thursday left its three key interest rates steady, meeting market forecasts.
The key deposit rate now stands at 2%, its lowest level since November 2022.
The interest rates on the main refinancing operations and the marginal lending facility are at 2.15% and 2.40%, respectively.
The decision to hold rates steady was the third one in a row. The bank last cut rates at its June meeting, marking an eight rate cut-run, which started when the ECB initiated its easing cycle in June 2024.
The bank said inflation remained close to the Governing Council’s 2% medium-term target, and that the council’s assessment of the inflation outlook was mostly unchanged.
“The economy has continued to grow despite the challenging global environment. The robust labor market, solid private sector balance sheets and the Governing Council’s past interest rate cuts remain important sources of resilience,” the central bank said.
However, the bank noted, the outlook is still uncertain, mostly due to ongoing global trade disputes and geopolitical tensions.
The ECB stressed that it is determined to ensure that inflation stabilizes at its 2% target in the medium term.
“It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission,” the EU monetary institution added.
The decision came after the eurozone’s annual inflation ticked up to 2.2% in September, from 2.1% in August, above the ECB’s medium-term target of 2%.
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