The European Central Bank (ECB) has decided to pause its recent cycle of interest rate reductions, maintaining its key rates at their current levels. Following eight consecutive easing steps, the deposit facility rate will remain at 2.0 percent, the main refinancing operations rate at 2.15 percent and the marginal lending facility rate at 2.4 percent. The decision was announced Thursday following a meeting of the ECB’s Governing Council.
The newly released data largely confirms the Council’s previous assessment of inflation trends, according to the published statement. Domestic price pressures continue to lessen and wage growth is decelerating. The ECB acknowledged that the global economic climate remains challenging, but noted the economy has shown resilience, partly attributable to the rate cuts implemented previously.
Despite the pause, the ECB’s Governing Council reiterated its commitment to adapt all instruments within its mandate to ensure inflation stabilizes at the medium-term target of 2 percent. The environment remains exceptionally uncertain, particularly due to ongoing trade tensions, the statement added.