The European Central Bank's Governing Council left its key interest rates unchanged at the monetary-policy meeting held in Frankfurt on 22-23 July 2026, keeping the key policy rate at 2.25%, Bank of Finland Governor Olli Rehn confirmed. The decision was announced on Thursday 23 July at 14:15 CET, followed by President Christine Lagarde's press conference at 14:45 CET, according to Saxo Bank's calendar. Rehn said the effects of the protracted conflict in the Middle East on inflation and economic growth "obviously dominated the discussion".
"We decided this time to keep interest rates unchanged. Our key policy rate therefore stays at 2.25%," Rehn wrote in a blog post published by Suomen Pankki, the Bank of Finland, on 24 July. The outcome was widely anticipated: Saxo Bank noted on 22 July that markets assigned an 85% probability to no change, and the Associated Press reported on 23 July that Europe's central bank had held rates steady amid swings in oil prices.
The Middle East conflict shaped the outlook on both sides of the ECB's mandate. According to the Eurosystem's latest forecast, published in June, the energy shock will push euro-area inflation to nearly 3.5% by the turn of the year, before easing back to around the ECB's 2% target next year. Rehn stressed that uncertainty is exceptionally high: if hostilities continue, energy prices may rise further and bring upside risks to inflation; a tenable ceasefire between the United States and Iran, with increased oil shipments from the Gulf, could instead leave inflation significantly lower than forecast. Shipping is once again unable to pass through the Strait of Hormuz, he added, and the likelihood of the waterway opening fully this year has recently decreased.