ECB holds rates steady on July 23, signals September hike

The European Central Bank held its key interest rates steady on Thursday, July 23, 2026, but signaled that another increase is likely in September as it continues to grapple with inflation risks stemming from volatile energy markets. The decision leaves the deposit facility rate at 2.25%, following a quarter-point hike in June.

In a statement, the ECB said uncertainty remains high and warned that the full inflationary impact of the recent energy shock has yet to play out. The central bank is closely monitoring the intensity and duration of the shock, as well as potential indirect effects on wages and broader prices. While current energy price assumptions are broadly in line with its June projections, the bank noted they remain well above levels seen before the outbreak of conflict in the Middle East.

ECB President Christine Lagarde, speaking at a press conference, said the inflation outlook into the first half of 2027 remains well above the bank's 2% target. She cited serious developments on commodity markets following the breakdown of a ceasefire between the United States and Iran. The price of Brent crude oil rose above $100 per barrel on Thursday, underscoring the ongoing...