ECB Keeps Deposit Rate at 2% as Inflation Nears Target

The European Central Bank left its key deposit rate unchanged at 2% during Thursday’s monetary policy meeting.
Analysts widely expected the decision, as eurozone inflation remains close to the 2% target and growth shows resilience.
The deposit facility rate, the main monetary policy tool, has stood at 2% since June after a 25-basis-point cut.
The ECB has lowered rates eight times since June 2024, down from a record 4%.
Rates for refinancing operations and the marginal lending facility also stayed unchanged at 2.15% and 2.40%.
President Christine Lagarde said the medium-term inflation outlook remains stable around the 2% target.
Eurozone inflation was 2% in June and July, rising slightly to 2.1% in August.
Despite stability, challenges remain, including political turmoil in France that could dampen investment.
The EU-US trade agreement has eased risks, but its economic impact is still under ECB assessment.
Oxford Economics expects weak near-term growth, forecasting 0.8% expansion in 2026 and inflation below 2% next year.
Analysts predict the ECB could cut rates once more in December, though a pause remains possible.
Lagarde will address fiscal developments in her press briefing later today.