The European Central Bank kept interest rates unchanged, citing contained inflation and modest growth while warning of energy-driven risks.
The European Central Bank left all three key interest rates unchanged in a unanimous decision, aligning with market expectations. Policymakers noted modest economic improvement but remained cautious about inflationary pressures from higher energy prices and geopolitical tensions.
Headline inflation eased to 2.8% in June, though the ECB projects it will stay above its 2% target into early 2027 before moderating. Wage growth continues to slow, reducing concerns about persistent domestic inflation, while financing conditions have tightened slightly since June.
President Christine Lagarde emphasized that future policy decisions will depend on incoming data, with no preset path for the September meeting. The ECB will evaluate new economic indicators before its next decision.