Bank Rate reduced to 3.75% - December 2025 Monetary Policy Summary and Minutes

If inflation moves away from the target by more than 1 percentage point in either direction, the Governor is required to send an open letter to the Chancellor explaining why ...

The Governing Council today decided to keep the three key ECB interest rates unchanged. Its updated assessment reconfirms that inflation should stabilise at the 2% target in the medium term. The new Eurosystem staff projections show headline inflation averaging 2.1% in 2025, 1.9% in 2026, 1.8% in 2027 and 2.0% in 2028. For inflation excluding energy and food, staff project an average of 2.4% in 2025, 2.2% in 2026, 1.9% in 2027 and 2.0% in 2028. Inflation has been revised up for 2026, mainly because staff now expect services inflation to decline more slowly. Economic growth is expected to be stronger than in the September projections, driven especially by domestic demand. Growth has been revised up to 1.4% in 2025, 1.2% in 2026 and 1.4% in 2027 and is expected to remain at 1.4% in 2028. The Governing Council is determined to ensure that inflation stabilises at its 2% target in the medium term. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of m ECB Holds Deposit Facility Rate At 2.00%; As Expected - Holds Main Refinancing Rate At 2.15% - Holds Marginal Lending Facility At 2.40% *ECB NOT PRE-COMMITTING TO A PARTICULAR RATE PATH *ECB TO FOLLOW DATA-DEPENDENT, MEETING-BY-MEETING APPROACH *ECB RAISES ECONOMIC GROWTH FORECASTS FOR NEXT TWO YEARS ECB UPDATED ASSESSMENT RECONFIRMS THAT INFLATION SHOULD STABILISE AT THE 2% TARGET IN THE MEDIUM TERM.