ECB Holds Rates in Hawkish Pause After June Hike

The ECB Governing Council kept its three key interest rates unchanged — deposit facility 2.25%, main refinancing operations 2.40%, marginal lending facility 2.65% — following the June 11 quarter-point hike that had reversed a year of rate cuts. President Christine Lagarde said the hold should not be read as the end of tightening: energy prices remain well above pre-war levels since the Middle East conflict began, and inflation is likely to stay persistently above target into the first half of 2027. Markets read the decision as a 'hawkish hold', preserving flexibility for a possible further hike at the next meeting on September 10.