ECB Holds Rates Amid Inflation and Growth Risks

2026-10-29 13:18 By Joana Ferreira 1 min. read

The European Central Bank left interest rates unchanged at its October 2026 meeting, as expected, keeping the main refinancing rate at 2.65% and the deposit facility rate at 2.50%.

The central bank warned that elevated energy prices could fuel inflation while weighing on economic activity, particularly if indirect and second-round effects intensify.

However, underlying inflation remains broadly stable, with no significant wage response so far.

While policymakers offered no clear guidance on the future rate path, the ECB noted that higher borrowing costs across Europe could further dampen growth and inflation.

The announcement came hours after ECB President Christine Lagarde reportedly announced plans to step down early, potentially triggering a major leadership transition amid heightened volatility in French bond markets and persistently high energy prices.

At the post-meeting press conference, Lagarde confirmed the ECB discussed a rate hike but unanimously agreed to hold rates steady.



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ECB Holds Rates Amid Inflation and Growth Risks
The European Central Bank left interest rates unchanged at its October 2026 meeting, as expected, keeping the main refinancing rate at 2.65% and the deposit facility rate at 2.50%. The central bank warned that elevated energy prices could fuel inflation while weighing on economic activity, particularly if indirect and second-round effects intensify. However, underlying inflation remains broadly stable, with no significant wage response so far. While policymakers offered no clear guidance on the future rate path, the ECB noted that higher borrowing costs across Europe could further dampen growth and inflation. The announcement came hours after ECB President Christine Lagarde reportedly announced plans to step down early, potentially triggering a major leadership transition amid heightened volatility in French bond markets and persistently high energy prices. At the post-meeting press conference, Lagarde confirmed the ECB discussed a rate hike but unanimously agreed to hold rates steady.
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