The European Central Bank keeps the reference interest rate at 2.5%, following the hikes in June and September. The decision comes with eurozone inflation at 3.8%, its highest level in three years.
The Governing Council of the European Central Bank (ECB) has decided to maintain interest rates, as expected by the markets. According to Infobae, the deposit facility rate remains at 2.50%, the main refinancing operations rate at 2.65%, and the marginal lending facility rate at 2.90%.
The institution opted to freeze rates after the increases applied in June and September. Markets assigned a 97.6% probability to this pause.
The ECB explains in its statement that energy prices continue to rise, posing upward risks for inflation and downward risks for growth. According to the body, the effects of this energy disruption have not yet been fully felt, core inflation remains stable, and wages are not responding significantly.
“Energy prices have continued to rise, which poses upward risks for inflation prospects and downward risks for growth prospects.”
Eurozone inflation reached 3.8% in September, up from 3.2% in August, according to Eurostat data. Energy prices rose 18.8% year-on-year. The Council assures that it maintains the goal of stabilising inflation at 2% in the medium term and that the direction of rates will depend on the data available in future meetings.
On another note, Christine Lagarde, president of the ECB, will leave the position on 7 February 2027, nearly nine months before the formal end of her eight-year term, scheduled for 31 October of that year. According to Reuters, citing sources from the institution, the decision was announced on the same day. The Financial Times had indicated in February that Lagarde sought to leave the bank before the French presidential elections in April 2027, so that the outgoing president, Emmanuel Macron, and German Chancellor Friedrich Merz could agree with other European leaders on the name of her successor.
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