The ECB has left key rates unchanged for the second time in a row

On September 11, the European Central Bank (ECB) kept key interest rates at their current level. This is stated in the regulator’s announcement.

The deposit rate is 2% per annum, the main refinancing operations rate is 2.15%, and the marginal lending rate is 2.4%. This decision is in line with market forecasts.

The regulator noted that inflation is currently close to the medium-term target of 2%, and the assessment of its prospects has not changed overall.

The ECB’s new forecasts show a picture of inflation similar to that expected in June. They predict that headline inflation will average 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027.

The euro area economy is projected to grow by 1.2% in 2025, up from 0.9% expected in June. The growth forecast for 2026 is now slightly lower at 1%, while that for 2027 remains unchanged at 1.3%.

According to ECB President Christine Lagarde, the risks to economic growth have become more balanced. Although recent trade agreements have reduced uncertainty, a new deterioration in trade relations could further weaken exports and lead to lower investment and consumption.

A deterioration in financial market sentiment could lead to tighter financing conditions, greater risk aversion, and weaker growth. Geopolitical tensions remain a major source of uncertainty.

On the other hand, Lagarde noted that higher-than-expected defense and infrastructure spending, together with reforms, will contribute to growth. Improved business confidence could stimulate private investment. Sentiment could also improve and activity could be stimulated if geopolitical tensions ease or if the remaining trade disputes are resolved sooner than expected.

The outlook for inflation remains more uncertain than usual due to still-volatile global trade policy.

Recall that inflation in the eurozone rose by 2.1% in August this year compared to the same month in 2024, according to preliminary data from Eurostat.