The ECB leaves interest rates on hold. Lagarde: “Energy shock impacts inflation and GDP”

MILAN – The European Central Bank leaves the cost of money unchanged. The interest rate on deposits remains at 2.50%, that on main refinancing at 2.65%, that on marginal loans at 2.90%. The move, widely expected by the markets, follows two 25 basis point increases announced in 2026 and replicates yesterday's decision by the US Federal Reserve.

Inflation "stable", but risks remain

Although energy prices continue to rise, and "the energy shock is still manifesting its full effects", according to the Governing Council "so far underlying inflation has remained broadly stable and wages have not reacted significantly at this stage". But he warns: “The greater magnitude and duration of the energy shock as well as its implications for indirect and second-round effects are likely to increase inflation and weaken growth.”