The European Central Bank decided, at its meeting moments ago today, Thursday, September 11, to keep its three main interest rates unchanged. The deposit rate was kept at 2%, the main refinancing operations at 2.15%, and the lending facility at 2.40% for the second consecutive month after seven consecutive rate cuts.
The bank’s interest rate statement stated that inflation is at the 2% target, and the Governing Council’s assessment of inflation expectations remains broadly unchanged.
The Council’s inflation forecasts were similar to those forecast in June, with headline inflation expected to average 2.1% this year, 1.7% next year, and 1.9% in 2027. Excluding energy and food, inflation is expected to average 2.4% this year and 1.9% next year. The eurozone economy is expected to grow by 1.2% this year, down from 0.9% in the June forecast. It lowered its forecast for next year to 1%, and stabilized at 1.3% in 2027.
The asset purchase program (APP) and the pandemic emergency purchase program (PEPP) are tapering at a measured and predictable pace, as the European system has stopped reinvesting capital payments from maturing securities.
The European Central Bank (ECB) affirmed its commitment to ensuring sustained inflation stability at its 2% target and will follow a data-driven, meeting-by-meeting approach to determining the stance of monetary policy. It also announced its readiness to adjust all tools to ensure inflation stability.
Markets are awaiting the ECB President’s comments and responses to journalists’ questions at the press conference, which will be held approximately 45 minutes from now.