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ECB Holds Rates at 2%, Lifts Growth Outlook, Sees 2028 Inflation at 2.0%

18 December 2025

ECB Holds Rates at 2%, Lifts Growth Outlook, Sees 2028 Inflation at 2.0%
Christine Lagarde, president of the European Central Bank, at the ECB Governing Council meeting in Frankfurt on December 18, 2025. Photo by the ECB under CC BY-ND-NC 2.0.

By Marta Vilar – FRANKFURT (Econostream) – The European Central Bank’s Governing Council on Thursday left its key interest rates unchanged and released updated staff projections pointing to stronger growth across the forecast horizon and inflation at 2.0% in 2028.

The three ECB interest rates will stay at 2.0% for the deposit facility, at 2.15% for the main refinancing operations and at 2.40% for the marginal lending facility.

In a statement, the Governing Council said its “updated assessment reconfirms that inflation should stabilize at the 2% target in the medium term.”

The ECB maintained its headline HICP projection at 2.1% for 2025, revised the 2026 forecast higher to 1.9%, and lowered the 2027 projection to 1.8%. The newly introduced projection for 2028 placed headline inflation at 2.0%.

Inflation excluding energy and food was still seen at 2.4% in 2025, while the 2026 forecast was revised up to 2.2% and the 2027 projection to 1.9%. Core inflation was projected at 2.0% in 2028.

Economic growth projections were revised higher across the entire forecast horizon, with GDP now seen expanding by 1.4% in 2025, 1.2% in 2026, 1.4% in 2027 and 1.4% in 2028.