Eurozone inflation climbed to 3.0 percent in April 2026, exceeding the ECB’s 2 percent target and driven by elevated energy prices stemming from Middle East tensions. In response, the Governing Council held the deposit facility rate steady at 2.00 percent during its April 30 meeting while revising 2026 inflation projections upward to 2.6 percent. Hawkish signals from officials and forecasts from the IMF pointing to possible rate increases have reinforced expectations that the central bank will maintain or tighten policy rather than ease further. Sluggish first-quarter growth has not offset these price pressures in trader assessments, leaving an 88 percent implied probability that no rate cut will occur before year-end.