Frankfurt: The European Central Bank (ECB) on Thursday kept its three key interest rates unchanged after raising borrowing costs at its previous meeting, citing uncertainty over the inflationary impact of the Middle East conflict. The interest rates on the deposit facility, main refinancing operations, and marginal lending facility were maintained at 2.25%, 2.40%, and 2.65%, respectively.

According to Anadolu Agency, at its previous meeting on June 11, the ECB raised all three rates by 25 basis points, taking the deposit facility rate from 2% to 2.25%, the main refinancing rate from 2.15% to 2.40%, and the marginal lending rate from 2.40% to 2.65%. The increases took effect on June 17.

The ECB said the outlook for energy prices remained highly volatile and stood well above levels recorded before the conflict in the Middle East, although it was currently close to the baseline of the June Eurosystem staff projections. It noted that uncertainty remained high and that the full inflationary impact of the energy shock had yet to materialize.

The Governing Council stated that it would closely monitor the intensity and duration of the shock, including its indirect and second-round effects, while remaining committed to ensuring that inflation stabilizes at its 2% target over the medium term. The bank reiterated that future decisions would remain data-dependent and be taken on a meeting-by-meeting basis, without pre-committing to a specific interest-rate path.

Eurozone annual inflation eased to 2.8% in June 2026, from 3.2% in May and marking its lowest level since February, as the energy inflation slowed sharply to 8.5% from 10.8%.