ECB leaves interest rates on hold amid brighter economic outlook

The European Central Bank on Thursday left interest rates unchanged amid a brighter forecast of economic growth while its assessment of the inflation outlook was "broadly unchanged".

The decision, which was widely expected, leaves the rate on the deposit facility at 2.00%, on the main refinancing operations at 2.15%, and on the marginal lending facility at 2.40%.

In July, the Frankfurt-based lender left interest rates unchanged despite a "challenging" environment and uncertainty caused by trade disputes.

On Thursday, the ECB said it is determined to ensure that inflation stabilises at its 2% target in the medium term.

"It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance," it stated.

The Governing Council is not "pre-committing to a particular rate path," the ECB added.

New ECB staff projections showed inflation a touch higher than projected in June, while economic growth projections were raised for this year.

ECB staff see headline inflation averaging 2.1% in 2025, 1.7% in 2026 and 1.9% in 2027, compared to 2.0%, 1.6% and 2.0% predicted in June.

For inflation, excluding energy and food, ECB staff expect an average of 2.4% in 2025, 1.9% in 2026 and 1.8% in 2027, versus 2.4% in 2025 and 1.9% in both 2026 and 2027, forecast in June.

The economy is projected to grow by 1.2% in 2025, revised up from the 0.9% expected in June. The growth projection for 2026 is now slightly lower, at 1.0%, while the projection for 2027 is unchanged at 1.3%.

The euro traded at USD1.1673 shortly after the announcement compared to USD1.1685 before.