The ECB left all three policy rates unchanged. Banks continue to earn 2.50% on overnight deposits, while the main refinancing rate stands at 2.65% and the marginal lending rate at 2.90%. Higher energy costs leave the central bank weighing two different effects: they raise the prices people pay while reducing the income households have left to spend.
A heating bill affects the household budget immediately. It takes longer to see whether manufacturers raise their selling prices or employees secure larger pay increases. At the time of the decision the ECB saw little evidence of a material wage response, and observed that underlying inflation had remained broadly stable.
Financing conditions had tightened since the previous meeting. A business renewing a bank loan may therefore face a different borrowing cost even though the policy rate has not moved. The Governing Council gave no fixed timetable for its next interest rate change.