April 11, 2024
Effective April 11, 2024, the Governing Council made the decision to keep the three key interest rates set by the European Central Bank (ECB) unchanged. Therefore, the interest rate on the main refinancing operations, the marginal lending facility, and the deposit facility will all remain at 4.50%, 4.75%, and 4.00%, respectively.
The latest data reaffirms the Governing Council’s earlier assessment of the medium-term inflation outlook, indicating a continued decline in inflation primarily driven by lower food and goods prices. Measures of underlying inflation are also showing signs of easing, alongside a gradual moderation in wage growth, with firms offsetting rising labour costs by absorbing them into profits. Restrictive financing conditions, coupled with past interest rate hikes, are exerting downward pressure on demand, further contributing to the decline in inflation. However, strong domestic price pressures are keeping services price inflation elevated, highlighting the mixed dynamics influencing inflationary trends.
The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It considers that the key ECB interest rates are at levels that are making a substantial contribution to the ongoing disinflation process. The Governing Council’s future decisions will ensure that its policy rates will stay sufficiently restrictive for as long as necessary. If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction. In any event, the Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction, and it is not pre-committing to a particular rate path.
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