The European Central Bank left its three key interest rates unchanged at its meeting on 5 February, reaffirming that inflation is expected to stabilise at its 2% target over the medium term.
The ECB said the euro area economy remains resilient despite a challenging global environment. Low unemployment, strong private sector balance sheets, the gradual rollout of public spending on defence and infrastructure, and the continued effects of past interest rate cuts are supporting growth. However, the outlook remains uncertain due to global trade policy risks and ongoing geopolitical tensions.
The Governing Council reiterated its commitment to a data-dependent, meeting-by-meeting approach to monetary policy and stressed that it is not pre-committing to any specific interest rate path. Future rate decisions will be guided by the inflation outlook and associated risks, underlying inflation dynamics and the strength of monetary policy transmission, based on incoming economic and financial data.
The ECB kept the deposit facility rate at 2.00%, the main refinancing rate at 2.15% and the marginal lending facility rate at 2.40%.
The ECB also confirmed that its Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) portfolios continue to decline at a measured and predictable pace, as the Eurosystem no longer reinvests principal payments from maturing securities.
