ECB Holds Rates Steady, Deposit Rate at 2.50%, as Energy Prices Lift Inflation Risks
| Pair | Now | Since publish |
|---|---|---|
| EURUSD | — | — |
- ECB held deposit rate at 2.50%, as expected, unanimously
- Energy prices above baseline; inflation risks up, growth risks down
- Lagarde: a hike was debated; meeting-by-meeting approach retained
- Euro dipped to about 1.1106-1.1130 during the press conference
The ECB Governing Council unanimously kept its three key interest rates unchanged, in line with expectations: the deposit rate at 2.50%, the main refinancing rate at 2.65% and the marginal lending facility at 2.90%. The statement said energy prices have continued to rise, posing upside risks to inflation and downside risks to growth. Underlying inflation has stayed broadly stable and wages show no material response so far.
President Christine Lagarde said policymakers discussed whether a hike was appropriate but judged that a measured approach remained justified for now. She said headline inflation is likely to stay well above target in coming quarters, while financial conditions have tightened and growth risks lean to the downside. Near-term growth should be supported by AI investment and government spending, though higher energy prices and financing costs are weighing on confidence. The ECB will follow a meeting-by-meeting approach. Sources noted the euro dipped to a low of around 1.1106-1.1130 during the press conference. Lagarde’s announced departure in February was also reported earlier the same day.