ECB holds rates steady as inflation drifts back towards target
The European Central Bank’s Governing Council voted unanimously on Thursday to hold its three key interest rates unchanged, pointing to continued progress on disinflation and a labour market that is rebalancing gradually.
Headline inflation in the euro area stood at 2.1 per cent in April, whilst core inflation eased to 2.3 per cent. President Lagarde told reporters that policy remains ‘well-positioned’ but ruled out any pre-commitment to a specific rate path.
Markets had largely priced in the hold. The euro was little changed against the dollar immediately following the decision. Several Council members are understood to favour further easing in the second half of 2026 should disinflation continue at its current pace.
The next monetary policy decision is scheduled for June, when the Council will receive updated staff projections.
