The European Central Bank Governing Council held key interest rates steady at 2% [1] during its meeting on Thursday, April 29, 2026.

This decision comes as the central bank attempts to balance rising inflation against a slowing eurozone economy. The move signals a cautious approach to monetary policy while the region faces external shocks and internal economic stagnation.

The benchmark deposit facility rate remains at 2% [1]. This marks the third straight meeting [3] where the Governing Council opted to keep rates unchanged. The decision was announced from the bank's headquarters in Frankfurt, Germany [2].

Officials are currently grappling with inflation pressures linked to the war in Iran [4]. These geopolitical tensions have pushed prices higher, complicating the bank's efforts to maintain price stability without further stifling economic activity.

At the same time, eurozone economic growth has slowed [2]. The Governing Council must weigh the risk of allowing inflation to remain high against the risk of triggering a deeper recession by raising borrowing costs.

While rates remain paused, the bank has kept the possibility of future hikes on the table [1]. The current trajectory suggests that the ECB is monitoring the impact of the conflict in Iran on energy and commodity prices before committing to a new direction.

“The European Central Bank Governing Council held key interest rates steady at 2%.”

The ECB's decision to maintain rates at 2% reflects a 'wait-and-see' approach to a volatile geopolitical landscape. By refusing to cut rates despite slowing growth, the bank is prioritizing the fight against inflation driven by the war in Iran. However, the refusal to hike rates suggests that the eurozone's economic fragility is now a significant constraint on the bank's ability to aggressively combat price increases.