The major central banks kept their rates steady in October, but rising energy prices maintain inflation risks. The ECB left the deposit rate at 2.50%.
The major central banks held their interest rates during October, following a period of monetary tightening. This is reported by iberoeconomia.es in information summarising an analysis by Reuters published on 4 November, which states that the Federal Reserve of the United States, the European Central Bank (ECB), and the Bank of Japan did not change their rates.
The exception came from Canada, which implemented a rate hike among the central banks of the ten most traded currencies.
The ECB decided on 29 October to keep its three official rates unchanged: the deposit facility at 2.50%, the main refinancing operations at 2.65%, and the marginal lending facility at 2.90%.
The institution considers that the rise in energy prices increases inflation risk and reduces growth. It warns that a prolonged energy disruption could transfer to other prices through second-round effects.
The ECB does not set a specific path for rates. Its decisions will depend on the evolution of inflation, wages, and financial conditions.
The rising costs of oil and gas increase transportation, production, and distribution costs. Companies may pass some of that increase onto their prices, and households face higher energy bills and greater indirect costs in food and transport.
For Spanish families, a pause in official rates does not immediately lower all mortgages. Variable loans are referenced to the euribor, which responds to market expectations about future monetary decisions, and deposits do not necessarily have to rise at the same pace as official rates.
Monetary authorities have not guaranteed that the next move will be a decrease. The evolution of inflation, energy, and economic data from major economies will shape the coming months.
You may also like
