ECB Keeps Interest Rates Unchanged Amid Ongoing Energy Price Uncertainty
The European Central Bank (ECB) Governing Council has decided to keep its three key interest rates unchanged. The decision was made on July 23, 2026, with the Governing Council citing a highly volatile outlook for energy prices.
Energy prices are currently near the baseline of the June Eurosystem staff projections and well above pre-conflict levels. Despite this, uncertainty remains high, and the full inflationary impact of the energy shock has yet to play out.
The Governing Council is closely monitoring the intensity and duration of the shock, as well as its indirect and second-round effects. The ECB's commitment to setting monetary policy to ensure that inflation stabilizes at 2% in the medium term remains unchanged.
ECB President Christine Lagarde emphasized that the Governing Council will follow a data-dependent approach, with interest rate decisions based on the assessment of the inflation outlook and risks surrounding it. The Transmission Protection Instrument is available to counter unwarranted market dynamics that pose a serious threat to monetary policy transmission.