The ECB left its deposit rate unchanged at 2.00% as widely expected, marking a second consecutive hold. The Governing Council reiterated its commitment to stabilizing inflation at 2% over the medium term and stressed a “data-dependent and meeting-by-meeting” approach. Policymakers emphasized they are “not pre-committing to a particular rate path”, leaving flexibility to respond to incoming data.
Fresh staff projections showed little change from June, with headline inflation expected to average 2.1% (prior 2.0%) in 2025, 1.7% (1.6) in 2026, and 1.9% (2.0%) in 2027.
Core inflation, excluding food and energy, is projected at 2.4% in 2025 before easing to 1.9% in 2026 and 1.8% in 2027. The figures reinforce the view that price pressures are gradually converging toward target.
On growth, the ECB revised up its 2025 forecast to 1.2% from 0.9%, but cut its 2026 estimate slightly to 1.0% (prior 1.1%). The 2027 projection was left unchanged at 1.3%.
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