The deposit facility, main refinancing and marginal lending rates remain at 2.50%, 2.65% and 2.90%. ECB President Christine Lagarde said policymakers debated a hike but unanimously held, citing stable underlying inflation, tighter long-term financing and uncertainty as reasons to await more data.
The European Central Bank kept its three key interest rates unchanged on 29 October 2026. President Christine Lagarde said policymakers debated an increase but unanimously chose to wait for more information.
Energy prices had risen above the path assumed in the September forecasts. The ECB said the larger, longer-lasting energy shock was likely to raise inflation and reduce growth, but underlying inflation—more persistent price pressures—had remained broadly stable.
| Facility or operation | Rate |
|---|---|
| Deposit facility | 2.50% |
| Main refinancing operations | 2.65% |
| Marginal lending facility | 2.90% |
Lagarde said long-term borrowing costs had also increased: average 10-year government bond yields had risen around 35 basis points—hundredths of a percentage point—since the cutoff for the September projections. The ECB said tighter financing conditions were likely to restrain both inflation and economic growth.
Overall inflation had moved further above the ECB’s 2% medium-term target, alongside a sharp increase in energy inflation.
The deposit rate stays at 2.50%. The bank says underlying price pressures remain broadly stable and commits to assessing fresh data before each rate decision.
| Measure | August | September |
|---|---|---|
| Overall inflation | 3.2% | 3.8% |
| Energy inflation | 14.3% | 18.9% |
The ECB said wage pressures remained moderate, with wages showing no material response to the energy shock at that stage. Lagarde said policymakers saw no additional risk of second-round effects—when the initial energy-price rise feeds into broader wage and price increases—beyond those already included in the September projections.
The bank warned that continued energy-supply disruption could keep energy prices higher for longer, reducing purchasing power, spending and investment.
In its October 30 record, the ECB confirmed that Lagarde had informed the Governing Council and European Council President António Costa the day before that she would step down on 7 February 2027.
Lagarde became ECB president in 2019.
Lagarde said December would bring new staff projections. Before then, policymakers would receive two new inflation readings, third-quarter economic output, employment and wage data, and further banking and business-activity indicators. Underlying inflation would receive particular attention.
The ECB says it will decide rates meeting by meeting, based on incoming data. It has not committed to a December increase or any other rate path.
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