The move aligns with expectations as the central bank adjusts rates to 2.25% on deposits amid persistent inflation pressures.
The European Central Bank raised its key interest rates by 25 basis points at its June meeting, bringing the deposit facility rate to 2.25%. The main refinancing and marginal lending rates now stand at 2.4% and 2.65%, respectively, as the ECB addresses inflation risks tied to geopolitical tensions, including the war in the Middle East.
The decision follows updated Eurosystem staff projections, which revised inflation forecasts upward for 2026 and 2027 due to higher energy prices. Headline inflation is now expected to average 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028, while core inflation projections remain elevated at 2.5% for 2026 and 2027.
Growth forecasts were also adjusted, with GDP expected to expand by 0.8% in 2026, 1.2% in 2027, and 1.5% in 2028. The ECB noted persistent uncertainty, citing upside risks to inflation and downside risks to economic growth.