ECB keeps rates steady as energy shock threatens growth
The deposit facility rate stays at 2.50 per cent as the central bank warns that higher energy costs are likely to push up inflation.
The European Central Bank left its three key rates on hold on 29 October 2026. Its Governing Council warned that an increasingly large and prolonged energy shock was likely to raise inflation and weaken economic growth.
The decision keeps the rate on main refinancing operations at 2.65 per cent and the marginal lending facility rate at 2.90 per cent. The deposit facility rate remains 2.50 per cent.
Despite rising energy prices, the Council said underlying inflation had shown broad stability so far, while wages had not yet responded materially. It also noted that financing conditions had become tighter since its previous meeting, which was likely to restrain inflation and growth.
Future policy decisions will be taken at each meeting using new economic and financial figures, the Council said. It will assess inflation prospects, associated risks and the effectiveness of monetary policy transmission, without committing in advance to a rate trajectory. Its medium-term inflation target remains 2 per cent.
Meanwhile, the Eurosystem’s holdings under the asset purchase programme and pandemic emergency purchase programme continue to decline. Principal repayments on securities reaching maturity are no longer being reinvested.
