The ECB left its key interest rates unchanged

The war in the Middle East has intensified inflationary pressures

Following its meeting on April 30, the European Central Bank (ECB) left its three key interest rates unchanged. This was announced in a statement by the regulator.

The deposit facility rate remains at 2.0%, the main refinancing operations rate at 2.15%, and the marginal lending rate at 2.40%.

The ECB emphasized that incoming data largely confirmed the previous inflation forecast, but price pressures are intensifying.

The regulator notes: the war in the Middle East has led to a sharp rise in energy prices, which has contributed to higher inflation and negatively affected economic sentiment.

“The implications of the war for medium-term inflation and economic activity will depend on the intensity and duration of the energy price shock, as well as the extent of its indirect and secondary effects. The longer the war lasts and the longer energy prices remain high, the stronger the likely impact on broader inflation and the economy will be,” the statement reads.

It also notes that long-term inflation expectations remain stable, but short-term expectations have risen significantly.

Meanwhile, according to preliminary Eurostat data, annual inflation in the eurozone rose to 3% in April from 2.6% in March.

As a reminder, by the end of 2025, the EU’s GDP grew by 1.6% year-on-year, while the eurozone economy expanded by 1.5%. In the fourth quarter of 2025, GDP increased by 1.4% year-on-year in the EU and by 1.3% year-on-year in the eurozone. On a quarterly basis, seasonally adjusted GDP rose by 0.3% quarter-on-quarter in both the EU and the eurozone.