Ahead of the upcoming European Central Bank (ECB) meeting, please find below insights from Nick Spencer-Skeen, Senior Executive Officer, Lunaro Markets Limited, on the key factors shaping the decision and market outlook.
The European Central Bank (ECB) Governing Council will be holding its July 2026 monetary meeting today at 13:15 (UK). This meeting is part of its regular schedule where the council reviews economic conditions, amongst other things, and decides on interest rates and other monetary measures.
Consensus suggests that rates will be held, for now, at 2.25%, with markets having priced in the probability of no change. From those expecting a hold, nearly all see a 25bp next time round, in September, so would view July as an interim meeting rather than a turning point. Eyes will be more focused on the post-meeting press conference than the actual decision itself today, unless of course, we have any unexpected action.
Since the last meeting in June the economic picture has become somewhat more complicated. Geopolitical tensions have pushed and then held energy costs higher, this is now embedding itself into broader inflation. The post-meeting conference expects little change in ECB’s communication, with the language regarding inflation and growth risks to remain the same.The focus today therefore is not if, but when, the next rate increase will take place and markets will be looking for clear signals from the words of Chairman, Christine Lagarde after.
