As Expected, the ECB Maintained Its Rates This Thursday

The European Central Bank (ECB) maintained its key interest rates unchanged for the fourth consecutive time during its December 2025 meeting. The main refinancing rate remains at 2.15%, while the deposit facility rate is set at 2.0%. This decision aligned with market expectations. Officials reiterated their commitment to a data-driven approach, adjusting monetary policy based on economic conditions at each meeting. Additionally, the central bank released new projections from its services. Economic growth is expected to be stronger than previously forecasted in September, primarily due to domestic demand. Growth has been revised upward to 1.4% for 2025, 1.2% for 2026, and 1.4% for 2027, with a consistent forecast of 1.4% for 2028. Overall inflation is projected to average 2.1% in 2025, 1.9% in 2026, 1.8% in 2027, and 2.0% in 2028. The upward revision for inflation in 2026 is mainly attributed to analysts now anticipating a slower decline in service inflation.