span>span>Thursday 24th July 2025/span>span> - 13:45 (BST)/span>/span>
The European Central Bank left interest rates on hold at its July meeting, bringing a halt to its protracted monetary easing campaign after eight consecutive cuts. The decision keeps the main refinancing rate at 2.15% and the deposit facility at 2.0% (the lowest levels since late 2022) as policymakers adopted a cautious stance in the face of renewed global uncertainty.
The pause in rate reductions follows signs that the eurozone economy is beginning to stabilise, with headline inflation returning to the ECB’s 2% target in June for the first time since 2021. The Governing Council offered no clear guidance on future moves but stressed the need to assess the cumulative effects of past cuts alongside external risks, including the prospect of fresh US trade tariffs and their possible drag on growth.
“Policy transmission takes time,” ECB President Christine Lagarde said in a post-meeting press conference, adding that the current stance remains “broadly appropriate” as the Bank evaluates evolving inflation dynamics and geopolitical headwinds.
The decision is likely to have nuanced implications for the euro. While the end of the easing cycle removes a key headwind for the single currency, the ECB’s dovish tone and heightened caution may limit any significant appreciation. Currency traders are expected to weigh the ECB’s stance against that of the US Federal Reserve, where rate cuts remain a live discussion but have yet to materialise. A prolonged divergence in policy paths could constrain euro gains, particularly if US growth data continues to outperform expectations.
