ECB Holds Interest Rates Amid Ongoing Oil Price Concerns

The European Central Bank (ECB) has decided to keep its three key interest rates unchanged. The decision was made at a time when oil prices are increasing due to the Iran war escalation.

The ECB stated that energy price inflation declined to 8.5 percent in June from 10.8 percent in May, but still stands well above pre-conflict levels. Despite this decline, the overall rise in energy prices since the conflict began 'is likely to keep inflation well above target into the first half of 2027,' according to an ECB statement.

The interest rate on the deposit facility remains at 2.25 percent, while the rates on the main refinancing operations and the marginal lending facility remain unchanged at 2.4 percent and 2.65 percent respectively.