The European Central Bank is widely expected to leave its key interest rates unchanged at the conclusion of its July 23 Governing Council meeting in Frankfurt, with analyst consensus unanimous and markets pricing less than a 5% chance of any rate change. ING THINK. The decision is due at 14:15 CET, followed by President Christine Lagarde's press conference at 15:00 CET.

The hold comes six weeks after the ECB raised all three key rates by 25 basis points at its June meeting, bringing the deposit facility to 2.25%, the main refinancing operations rate to 2.40%, and the marginal lending facility to 2.65%. ECB. That June hike was unanimous, with all Governing Council members supporting the 25bp increase proposed by Chief Economist Philip Lane. ING THINK.

The June move itself was no surprise to markets. Going into that meeting, the euro had already priced a hawkish ECB outcome including the 25bp deposit-rate hike to 2.25%. ING THINK. The broader rate trajectory has been steep. The ECB cut rates four times in the first half of 2025, reducing the deposit rate from 3% at the start of the year to 2% by mid-2025. CNBC. The June 2026 hike then partially reversed that easing cycle.

Looking ahead, analysts expect the ECB to hike again in September 2026 before pausing for the remainder of the year. Morningstar. ING's THINK platform, in its July 2026 cross-central-bank review, noted the ECB still looked set to hike again. ING THINK. That aligns with the platform's March analysis, which flagged that an ECB hike was priced in by July and that the December staff projections had one rate cut pencilled in for 2026. ING THINK.

Notwithstanding the overwhelming consensus for a hold this week, ING's ECB preview noted that renewed Middle East tensions could still justify a surprise hike at the July meeting. ING THINK. That is an outside risk. With markets assigning under 5% probability to any rate move, the Governing Council would need a compelling, real-time rationale to deviate from the priced path.

The rate-setting context is worth framing precisely. The ECB's deposit rate sat at 2% after the mid-2025 easing cycle. The June hike added 25bp, bringing it to 2.25%. A further September hike, if it materializes, would push the deposit rate to 2.50% and would mark the second hike of 2026, further unwinding the aggressive easing delivered in the first half of 2025. Whether that pace continues into year-end depends on inflation data and the geopolitical risk picture between now and September.

For market participants, the key signal to watch on July 23 is not the rate decision itself, which is effectively locked in, but the forward guidance and any shift in tone from Lagarde at the press conference. A September hike is the base case across analyst desks, but the ECB's communication on whether that path is conditional on data, or more firmly committed, will shape front-end rates pricing. The June minutes already revealed unanimity around Lane's proposed hike, suggesting the Council is aligned. Any fracture in that alignment would be the material surprise.

The accounts of the July 23 meeting will be published in the standard timeframe, roughly four weeks after the decision, per ECB convention.