The ECB kept its key policy rates unchanged at 2.00%, 2.15%, and 2.40% in April 2026, while highlighting rising upside risks to inflation and downside risks to growth amid elevated energy prices.

• The deposit facility rate remained at 2.00%, the main refinancing rate at 2.15%, and the marginal lending facility at 2.40%, indicating a continued pause in policy rates.
• The Governing Council noted that incoming data has been broadly consistent with prior inflation assessments, but risks have shifted, with higher inflation risks and weaker growth risks emerging.
• Energy prices have risen sharply due to the Middle East conflict, pushing inflation higher and weighing on economic sentiment, indicating increased external pressure on the outlook.
• The impact of the energy shock on inflation and growth will depend on its duration and intensity, with longer-lasting price increases expected to have stronger second-round effects.
• Inflation was around the 2% target entering this period, while the economy showed resilience in recent quarters, suggesting a relatively stable starting point before the energy shock.
• Longer-term inflation expectations remain well anchored, but short-term expectations have increased significantly, pointing to near-term inflation pressures.
• The ECB reiterated a data-dependent, meeting-by-meeting approach with no pre-commitment to a rate path, emphasizing flexibility in response to evolving risks.
• Balance sheet runoff continues, with APP and PEPP portfolios declining as reinvestments are no longer being made, maintaining a steady pace of quantitative tightening.