ECB seen holding deposit rate at 2.25%

Officials said the European Central Bank is expected to hold its deposit rate at 2.25% this week, following a 25 basis point rise in June. Markets are likely to focus on President Christine Lagarde's press conference for signs that the bank will keep a September hike on the table.

Governing Council timing and signals

Officials said the statement is expected to repeat language stressing a meeting-by-meeting, data-dependent approach rather than offering a pre-committed path. Commentary will be framed around how long and how intense the resumed Middle East conflict proves to be, with guidance tied to energy-price and inflation developments.

Officials said the most likely path is a hold now and one additional hike in September if the conflict sustains or deepens, moving the deposit rate toward the upper end of an estimated neutral range. A de-escalation would remove that conditional rationale and reduce pressure for further tightening.

Officials said the Governing Council's decision is due at 14:15 CEST on Thursday, with the press conference at 14:45 CEST. Traders should watch language on the conflict, energy costs, and whether any loosening of forward guidance appears; small shifts in wording are likely to drive rates moves more than the vote itself.