The European Central Bank kept its three key interest rates unchanged on 11 September 2025, holding the deposit facility rate at 2.00% for a second consecutive meeting after also leaving rates on hold in July. The rates on the main refinancing operations and the marginal lending facility remained at 2.15% and 2.40% respectively.
The Governing Council said inflation was currently at around its 2% medium-term target and that its assessment of the inflation outlook was broadly unchanged. Euro area annual inflation edged up to 2.1% in August 2025 from 2.0% in July, while inflation excluding energy and food held at 2.3%.
GROWTH FORECAST RAISED TO 1.2%
New ECB staff projections raised the 2025 euro area growth forecast to 1.2%, up 0.3 percentage points from the 0.9% projected in June. The 2026 forecast was trimmed by 0.1 percentage points to 1.0%, while the 2027 projection was unchanged at 1.3%. The economy grew by 0.7% in cumulative terms over the first half of 2025, supported by resilient domestic demand, with stronger growth in the first quarter than in the second.
Staff projected headline inflation at 2.1% in 2025, 1.7% in 2026 and 1.9% in 2027. Inflation excluding energy and food was projected at 2.4% in 2025, 1.9% in 2026 and 1.8% in 2027. Compared with June, the headline projections were revised up by 0.1 percentage points for both 2025 and 2026 and down by 0.1 percentage points for 2027.
POLICY PATH REMAINS DATA-DEPENDENT
The Governing Council said it would follow a “data-dependent and meeting-by-meeting approach” to determining the appropriate monetary policy stance, adding that it was “not pre-committing to a particular rate path”. The September hold followed a series of rate cuts that brought the deposit facility rate down to 2.00% in June 2025.
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