As expected, the ECB left its deposit rate unchanged at 2% and maintained the data-dependent and meeting-by-meeting language in the statement. It highlighted that inflation is currently at around 2% and fresh projections show it close to that level also in 2027, although while it raised inflation forecasts for 2025 and 2026, it trimmed them for 2027. The growth outlook was also similar to the one from June.

Here are the highlights from the ECB statement (link here):

INFLATION:

ECONOMIC PROJECTIONS:

HICP INFLATION:

HICP CORE INFLATION (EX-ENERGY & FOOD):

GDP:

Market Reaction

In response to the ECB hold, the euro extended an earlier fall, while European government bonds pared losses, after the European Central Bank kept interest rates steady as widely expected but cut its inflation forecast for 2027.