ECB keeps rates on hold

FRANKFURT -- The European Central Bank (ECB) on Thursday kept its key interest rates unchanged, saying eurozone inflation remains broadly under control.

All three benchmark rates stayed on hold, with the deposit facility rate, the ECB's main policy rate, maintained at 2.0 percent, where it has stood since the last rate cut in June.

"Inflation is currently around the 2-percent medium-term target and the Governing Council's assessment of the inflation outlook is broadly unchanged," the central bank said in a statement.

According to the ECB staff's latest projections, euro area inflation is expected to average 2.1 percent in 2025 and 1.7 percent in 2026. The bank also raised its eurozone economic growth forecast for 2025 to 1.2 percent, up from 0.9 percent in its June forecast.

Inflation in the euro area went up slightly to 2.1 percent in August from 2.0 percent in July.

The ECB pointed out that its September staff projections on inflation were similar to those made in June.

Meanwhile, inflation outlook uncertainties are on the rise due to a "volatile global trade policy environment," the central bank noted.

"We are determined to ensure that inflation stabilises at our 2.0 percent target in the medium term," said the ECB statement.

"As regards the monetary policy outlook, today's policy announcement shows that the door to yet another rate cut is still open," said Global Head of Macro at ING bank Carsten Brzeski in a note.