The European Central Bank (ECB) has opted for caution and has decided to keep interest rates unchanged in the eurozone, in a context marked by the rising cost of energy and the growing economic uncertainty derived from the war in the Middle East.
The Governing Council of the monetary institution agreed this Thursday to keep the deposit facility at 2%, the main refinancing operations at 2.15%, and the marginal lending facility at 2.40%, thus prolonging the pause initiated after the end of the cycle of cuts applied in 2025.
The decision comes at an especially delicate moment for the European economy. The conflict in Iran and the regional escalation have caused a surge in energy prices, a particularly sensitive variable for an economy still dependent on the cost of imported gas and oil.
Energy tensions inflation again
In its statement, the ECB acknowledges that the war conflict is generating new inflationary pressures: "The war in the Middle East has led to a sharp increase in energy prices, driving inflation and affecting the economic climate."
The institution considers that the definitive impact will depend on how long the geopolitical crisis is prolonged and whether the increase in costs ends up being passed on to other sectors of the economy. The main fear is the so-called “second-round effect”, that is, that companies and services pass on the energy increase to consumer goods and wages, thus consolidating more persistent inflation.
A difficult balance
The ECB's decision reflects the complex balance that European monetary policy is going through. On the one hand, inflation accelerated again to 3% in April, moving away from the 2% target set by the monetary authority. On the other hand, the eurozone economy shows signs of exhaustion.
Economic growth barely advanced 0.1% during the first quarter of the year, fueling fears of a stagflation scenario, that is, low growth combined with high inflation.
The ECB considers, however, that the European economy maintains a certain capacity for resilience and recalls that long-term inflation expectations remain relatively stabilized.
A shared pause by the major central banks
The prudence of the ECB is not an exception. The world's main central banks have also opted to wait before modifying their monetary policies. The Bank of England maintains rates at 3.75%, the Federal Reserve of the United States within a range between 3.50% and 3.75%, and the Bank of Japan at a rate close to 0.75%.
The ECB's decision means that, for now, there will be no immediate changes in the cost of credit.
For European households, this implies that variable-rate mortgages will continue to move at levels similar to current ones, while consumer loans and business financing will maintain relatively stable conditions.
However, monetary stability does not eliminate risks. The rise in energy prices could translate into new price increases in transport, food, or basic supplies, reducing the purchasing power of households.
The entity insists that it will continue to apply a “data-dependent” approach, assessing economic developments meeting by meeting.