Key Interest Rate Hike To ensure inflation stabilizes at its 2% medium-term target, the ECB raised its three key interest rates by 25 basis points. Effective June 17, 2026, the new rates will be:
- Deposit facility: 2.25% Main refinancing operations: 2.40%
- Marginal lending facility: 2.65%
- Updated Economic Projections Eurosystem staff have revised their economic projections, reflecting the pronounced impact of the war on energy prices and commodity markets
Inflation: Headline inflation has been revised upward and is expected to average 3.0% in 2026, 2.3% in 2027, and finally hit the 2.0% target in 2028. Economic Growth: Growth projections have been revised downward to 0.8% for 2026 and 1.2% for 2027, before rebounding slightly to 1.5% in 2028.
Future Outlook and Policy Approach The overall economic outlook remains highly uncertain, carrying upside risks for inflation and downside risks for growth depending on the duration and intensity of the energy price shock. Moving forward, the Governing Council is not pre-committing to a specific rate path; instead, it will maintain a data-dependent, meeting-by-meeting approach based on incoming economic and financial data