The European Central Bank (ECB) has released the account of its monetary policy meeting held on July 22-23, 2026. The meeting discussed the current economic and financial developments in the euro area and the global economy. The ECB noted that the euro area economy remained resilient despite the ongoing conflict in the Middle East and the associated energy shock. The bank's Governing Council decided to keep the three key ECB interest rates unchanged, following the interest rate hike in June. The decision was based on the incoming information on the inflation outlook and surrounding risks, as well as the dynamics of underlying inflation and the strength of monetary policy transmission.
The ECB reported that headline inflation in the euro area decreased to 2.8% in June, down from 3.2% in May. Energy inflation declined to 8.5%, while non-energy inflation eased to 2.2%. Core inflation, which excludes energy and food, edged down to 2.4% in June. The bank noted that the energy shock continued to feed into higher prices, but the response of domestic prices would ultimately depend on the joint dynamics of profits and wages.
The ECB also discussed the global economic outlook, noting that the global economy was proving more resilient than expected despite the fluid and volatile situation in the Middle East. The bank highlighted the importance of monitoring commodity markets, particularly energy prices, and the potential risks to the inflation outlook. The ECB's Governing Council will continue to monitor the economic and financial developments and adjust its monetary policy stance as needed.
In terms of the labor market, the ECB reported that unemployment in the euro area remained close to historical lows, at 6.2% in May. However, job postings continued to decline, with Indeed postings and the LinkedIn hiring rate lower than a year ago. The bank noted that the fundamental drivers of medium-term economic growth remained intact, with private consumption, investment in new digital technologies, government spending on defense and infrastructure, and some recovery in exports expected to contribute to overall momentum.
The ECB's decision to keep interest rates unchanged was seen as a prudent move, given the ongoing uncertainty and risks in the global economy. The bank will continue to monitor the economic and financial developments and adjust its monetary policy stance as needed to ensure price stability and support economic growth in the euro area.