The European Central Bank pressed pause on its tightening cycle at its July 22-23 meeting, voting unanimously to hold all three key interest rates at their current levels. After pushing rates higher in June, the Governing Council decided it needed more data before moving again.
The deposit facility rate stays at 2.25%, the main refinancing operations rate at 2.40%, and the marginal lending facility rate at 2.65%.
Why the ECB stopped where it did
Inflation is heading in the right direction, but not fast enough to declare victory. Headline inflation fell to 2.8% in June 2026, down from 3.2% in May, a meaningful drop but still above the ECB’s 2% target.
Geopolitical tensions in the Middle East have kept energy markets jittery, and while prices have tracked roughly in line with Eurosystem projections, they remain elevated compared to pre-conflict levels.
