Key Facts
• On July 24, 2025, the European Central Bank (ECB) held a regular meeting in Frankfurt.
• The ECB decided to keep its key policy interest rate unchanged for the first time in eight meetings since July 2024.
• Since June 2024, the ECB shifted its monetary policy focus from inflation control to economic support.
• From June 2024 to July 2025 (excluding July 2024), the ECB reduced rates by 0.25% per meeting.
• The central bank deposit rate dropped from 4% in June 2024 to 2% currently.
• The main borrowing rate decreased from 4.5% to 2.15% over the same period.
• Eurozone consumer price inflation in June 2025 was stable at 2%, meeting the ECB’s medium-term target.
• The ECB aims to assess the impact of U.S. tariff policies on European prices and the economy.
• Financial markets widely anticipated a pause in rate cuts during this meeting.
Summary
The European Central Bank (ECB) held its key policy interest rate steady on July 24, 2025, marking the first pause in eight meetings since July 2024. This decision reflects the ECB’s assessment that prior rate cuts, aimed at supporting the economy, have progressed sufficiently. Since June 2024, the ECB shifted its focus from inflation control to economic support, reducing rates by 0.25% per meeting, except in July 2024. As a result, the central bank deposit rate and main borrowing rate have halved to 2% and 2.15%, respectively. Eurozone inflation in June 2025 remained stable at 2%, aligning with the ECB’s target. The bank is now monitoring the impact of U.S. tariff policies on European prices and economic conditions. Financial markets had largely expected this pause in rate adjustments.
