ECB leaves key interest rates unchanged

The regulator expects inflation to remain above target over the next year

On July 18, the European Central Bank (ECB) left key interest rates at the current level. This is stated in the report of the institution.

The base rate for loans is 4.25%, for deposits – 3.75%, for margin loans – 4.5%.

According to the regulator, although some core inflation rates increased in May due to one-time factors, in June most of them were either stable or decreased. The ECB expects inflation to remain above its target over the next year.

The ECB will continue to follow a data-driven approach. In particular, interest rate decisions will be based on an assessment of the inflation outlook in light of incoming economic and financial data, the evolution of core inflation, and the strength of monetary policy. The ECB does not commit to a specific rate level in the future.

According to the President of the European Central Bank, Christine Lagarde, the bloc’s economy will be further supported by domestic demand and the expected rise in exports amid the global economic recovery. Weakening of the global economy, escalation of trade tensions between leading countries and geopolitical risks may negatively affect the growth of the eurozone, the regulator notes.

In June, the European Central Bank cut key interest rates by 25 basis points for the first time since 2019. The ECB also raised its inflation forecast to 2.5% in 2024 from the previously expected 2.3%, and to 2.2% in 2025 from 2%. In addition, the regulator raised its forecast for eurozone GDP growth in 2024 to 0.9% from 0.6% expected in March, but lowered it for 2025 to 1.4% from 1.5%.