ECB interest rates remained unchanged on October 29, 2026, with the deposit facility rate held at 2.5% despite eurozone inflation reaching a three-year high. The decision followed a quarter-point increase in September and met market expectations.
Key Takeaways
- The ECB said higher energy prices pose risks of faster inflation and weaker growth.
- Eurozone headline inflation reached 3.8% in September, while energy price inflation was 18.8%.
- The central bank said it is not committing to a particular future rate path.
ECB interest rates remain on hold
The Governing Council left all three of its key rates unchanged. Its October monetary policy decision kept the deposit facility rate at 2.50%, the main refinancing rate at 2.65% and the marginal lending rate at 2.90%.
The hold followed a 25-basis-point increase in September. The ECB also raised rates in June, its first increase since 2023, as energy price pressures resurfaced after the outbreak of the US-Israeli war with Iran in February.
| Item | Details |
|---|---|
| Deposit facility | 2.50% |
| Main refinancing operations | 2.65% |
| Marginal lending facility | 2.90% |
Energy costs complicate the outlook
The ECB said energy prices had continued to rise, creating upside risks to inflation and downside risks to growth. It said underlying inflation had remained broadly stable and wages had not shown a material response at this stage.
Headline inflation in September was the highest since September 2023. The ECB said financing conditions had tightened since its previous meeting, a development likely to weigh on both inflation and growth.
What policymakers and analysts are watching
The ECB said it would set policy meeting by meeting based on incoming data and had not pre-committed to a rate path. Its medium-term inflation target is 2%.
Deutsche Bank chief European economist Mark Wall said he expected one more increase, to 2.75% in December. That is an economist’s forecast, not an ECB decision. Wall also pointed to uncertainty surrounding Christine Lagarde’s announced departure as ECB president.
Next milestone
The ECB scheduled a press conference for 14:45 CET on October 29 to discuss the decision.
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