The European Central Bank (ECB) Governing Council announced Thursday that it has maintained its key interest rates unchanged. The decision was made against a backdrop of elevated inflation across the euro area, which has been influenced by developments stemming from the middle East conflict. The rates for the deposit facility, main refinancing operations, and the marginal lending facility were kept steady at 2.0%, 2.15%, and 2.40%, respectively.
This marks the second consecutive period with no adjustment to these rates, as the ECB last modified them in June 2025. The central bank noted that the conflict has contributed to sharp increases in energy prices, thereby contributing to inflationary pressures and tempering economic sentiment. The ECB stated that the long-term impact of the war on inflation and economic activity will depend on the duration and intensity of the energy price shock.
Despite these pressures, the Governing Council expressed confidence in its ability to navigate the current uncertainty. While inflation expectations remain well anchored in the long term, short-term expectations have risen notably. The ECB emphasized that its monetary policy stance will remain data-dependent, adopting a meeting-by-meeting approach.
Future decisions regarding interest rates will be based on a thorough assessment of the inflation outlook, associated risks, and incoming economic and financial data. The Governing Council did not pre-commit to any specific path for future rate adjustments. Preliminary data from Eurostat indicated that annual inflation in the euro area is projected to rise to 3.0% in April, up from 2.6% in March.
This decision aligned with market expectations, although analysts anticipate potential shifts at the June policy meeting due to ongoing inflation dynamics related to the geopolitical situation.
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