The European Central Bank left its three key interest rates unchanged on 24 July, breaking a year-long easing cycle that had lowered borrowing costs by 200 basis points since September 2023. The deposit facility stays at 2.00%, the main refinancing rate at 2.15% and the marginal lending rate at 2.40%. The Governing Council said inflation has returned to its 2% medium-term goal and that incoming data broadly confirm its previous outlook, with domestic price pressures and wage growth continuing to moderate. It credited earlier rate cuts for keeping the euro-area economy “resilient,” while warning the external environment remains “exceptionally uncertain,” particularly because of unresolved trade disputes with the United States and a stronger euro. President Christine Lagarde told reporters the decision was unanimous and reaffirmed a meeting-by-meeting, data-dependent stance. She cautioned that higher tariffs and currency strength could damp corporate investment, even as indicators suggest underlying inflation will stabilise around target. Risks to growth remain tilted to the downside, and the ECB stands ready to use all instruments—including the Transmission Protection Instrument—should market conditions worsen. Money-market pricing still implies a high probability of at least one more 25-basis-point cut by year-end, but Lagarde refused to provide forward guidance, saying it is too early to gauge the net impact of possible trade disruptions on prices. The pause leaves policy rates near the midpoint of the ECB’s estimated neutral range and puts the focus on incoming data ahead of the next meeting.