ECB: Interest Rates Remain Unchanged; Inflation Projections Revised Down

7 March 2024

By Isabel Teles – FRANKFURT (Econostream) – The European Central Bank’s Governing Council on Thursday decided once again to keep its three key interest rates unchanged, as widely expected by markets and analysts.

In a statement published on its website, the ECB also announced a downward revision of its staff projections for inflation. Headline inflation was revised to 2.3% in 2024, 2% in 2025 and 1.9% in 2026. Core inflation was revised to 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026.

‘Although most measures of underlying inflation have eased further, domestic price pressures remain high, in part owing to strong growth in wages. Financing conditions are restrictive and the past interest rate increases continue to weigh on demand, which is helping push down inflation’, the statement said.

Growth projection was revised down to 0.6% in 2024. The updated growth projections for 2025 and 2026 are, respectively, 1.5% and 1.6%. 

The three key ECB interest rates remain unchanged at 4.5% for main refinancing operations, 4.75% for the marginal lending facility, and at 4% for the deposit facility.

Data would continue to guide the Governing Council’s decisions, especially regarding the inflation outlook, underlying inflation and monetary policy transmission, the statement said.

‘The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner’, the ECB said. ‘Based on its current assessment, the Governing Council considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. The Governing Council’s future decisions will ensure that policy rates will be set at sufficiently restrictive levels for as long as necessary.’