ECB interest rate forecast
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ECB interest rate forecast – key interest rate, interest rate decision and outlook
Here you will find the current ECB policy rate, our assessment of the ECB’s next interest rate decision and the key factors that will determine the future direction of interest rates.
The current assessment
10. September 2026
The European Central Bank (ECB) raised its key interest rate by 25 basis points, as expected. The deposit rate now stands at 2.5%.
The inflation rate in the eurozone had recently risen above 3% again. This was reason enough for the central bank to raise rates further. The conflict in the Middle East is expected to continue to generate inflationary pressure, and inflation is likely to remain well above target for an extended period, according to the ECB.
In the baseline scenario of the latest projections, the ECB’s economists expect average headline inflation to stand at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028. In the baseline scenario, inflation excluding energy and food is projected to be 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028. Compared with June, the baseline projection for 2026 remains unchanged, while those for 2027 and 2028 have been revised upwards.
The ECB continues to keep all options open. During the press conference, ECB President Christine Lagarde remained tight-lipped. The Governing Council would decide on a meeting-by-meeting basis; there is no pre-determined course of action.
However, representatives of the central bank emphasised that inflation risks remain tilted to the upside. This certainly suggests that further monetary tightening cannot be ruled out. Although our base case continues to assume that key interest rates will remain unchanged this year, the likelihood of another rate hike increased significantly in light of the hawkish tone.
The ECB continues to keep all options open.
Dr Thomas Gitzel Chief Economist
Current ECB key interest rates
The European Central Bank steers its monetary policy via three key interest rates. The following rates have been in force since 16 September 2026:
- Deposit rate: 2.50%
- Main refinancing rate: 2.65%
- Marginal lending rate: 2.90%
The deposit rate is now regarded as the ECB’s most important monetary policy reference rate. It determines the payment of interest that banks receive when they deposit surplus liquidity with the central bank, and thus also influences money market, savings and lending rates across the euro area.
What will influence the ECB’s next interest rate decisions?
The ECB monitors four factors in particular when determining its future monetary policy course:
- Inflation: The ECB aims for an inflation rate of 2 per cent in the medium term. If inflation remains significantly above this level, pressure on the central bank to maintain a restrictive monetary policy or to raise interest rates further will increase.
- Energy prices: Oil and gas prices are currently having a particularly significant impact on inflation in the euro area. The key question is whether higher energy costs are merely temporary or are increasingly being passed on to other prices.
- Core inflation and wages: The ECB does not focus solely on headline inflation. Price trends excluding energy and food are also important. Rising wages or a widespread pass-through of higher costs could sustain inflationary pressure for longer.
- Economic growth: Higher interest rates curb investment and consumption. The ECB must therefore strike a balance between combating inflation and the impact of a restrictive monetary policy on economic growth.
FAQ
The ECB’s key interest rate, known as the deposit rate, currently stands at 2.50 %. The main refinancing rate is 2.65 % and the marginal lending rate is 2.90 %. These interest rates have been in force since 16 September 2026.
The ECB raises its key short-term interest rates when inflationary pressure is too high. Higher interest rates make credit more expensive, make saving more attractive and can therefore curb consumption and investment. The aim is to reduce demand and, consequently, price pressure.
The ECB will base its future interest rate decisions primarily on the following factors:
- Inflation trends in the euro area
- Energy and commodity prices
- Wage trends and the labour market
- Economic growth in the euro area countries
- Geopolitical risks
- Trends in expected inflation
The ECB usually takes its monetary policy decisions approximately every six weeks. The next decision will take place on 29 October 2026.
Below are the dates of the ECB’s forthcoming interest rate decisions:
- 29 October 2026
- 17 December 2026
- 4 February 2027
- 18 March 2027
- 29 April 2027
- 10 June 2027
Should inflation return to the 2 per cent target on a sustained basis and economic growth slow down, interest rate cuts could once again become a possibility in the course of 2027.
The European Central Bank aims for an inflation rate of 2 % in the euro area in the medium term. Short-term fluctuations are possible. What matters is that inflation stabilises at this target over the medium term.
Talk to our experts
Would you like to know how current interest rate trends in the eurozone might affect your investments or your financial situation? Our experts will be happy to help you make sense of the latest developments.
Talk to our experts
Would you like to know how current interest rate trends in the eurozone might affect your investments or your financial situation? Our experts will be happy to help you make sense of the latest developments.