The ECB’s Governing Council decided on 18 December 2025 to leave its three key interest rates unchanged, reaffirming that inflation is expected to stabilise around the 2% target in the medium term. According to updated Eurosystem projections, headline inflation is forecast to average 2.1% in 2025 and fall below 2% in the following years before returning to 2.0% in 2028, while economic growth prospects have been revised slightly upward, driven mainly by stronger domestic demand. The ECB emphasized that future decisions will remain data-dependent and made on a meeting-by-meeting basis, without pre-committing to a specific interest rate path, while asset purchase programmes continue to be phased out gradually.
