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ECB Holds Rate at 2.25% as Lagarde Warns War Could Lift Inflation

A temporary hold reflects cooler June inflation yet leaves room for more hikes if renewed US–Iran fighting lifts energy-driven price pressures.

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La BCE avait relevé le 11 juin le taux de dépôt, inchangé depuis juillet 2025, d'un quart de point à 2,25%
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En dépit de la guerre au Moyen-Orient, la BCE maintient l'ensemble de ses taux d'intérêt inchangés

Overview

  • On Thursday the European Central Bank left its main deposit rate at 2.25%, pausing after a 0.25 point rise in June that was the first increase since 2023.
  • ECB President Christine Lagarde said a prolonged US–Iran conflict could lead to inflation higher than expected by intensifying the energy shock.
  • Eurozone inflation eased to 2.8% in June from a 3.2% peak in May, a drop that gave the ECB scope to pause but does not remove upside risk.
  • Market analysts and banks including Deutsche Bank and UniCredit view July’s pause as temporary and say a further rate increase in September is likely if energy disruptions persist.
  • Closure threats to the Strait of Hormuz and Houthi actions in the Red Sea could raise oil and shipping costs, squeeze household budgets and supply chains, and force the ECB to tighten further at the cost of weaker growth.