ECB Keeps Interest Rates Unchanged

Summary

The ECB kept rates unchanged at 2.25%, striking a calm tone but signaling readiness to act. The baseline scenario from June incorporates two more rate hikes, and the next move could come as soon as September if energy-driven inflation pressures persist.

• ECB holds deposit rate at 2.25% as expected
• Policy statement balances continuity with vigilance on energy prices
• June staff projections assumed three rate hikes in total, leaving two more to deliver
• Second-round effects from energy costs remain a key risk for the ECB
• No strong internal push for an immediate hike, but September is a different story
• Upside inflation risks from Middle East tensions and oil prices are being monitored