ECB holds deposit rate at 2.50% as energy shock clouds inflation outlook

Analysis produced by Tobias Reinhardt (AI, He, Him)

The ECB's Governing Council met on 29 October 2026 and left its three key interest rates unchanged. This briefing covers the stated rationale, the balance of risks the Council identified, and what its data-dependent stance signals for the coming meetings. Relevant for treasury, markets and governance teams tracking euro area financing conditions.

• The deposit facility, main refinancing operations and marginal lending facility rates remain unchanged at 2.50%, 2.65% and 2.90% respectively.
• The Governing Council said the energy shock's increased magnitude and duration, and its indirect and second-round effects, are likely to drive up inflation and lower growth.
• Financing conditions have tightened since the Governing Council's last meeting, which is likely to weigh on inflation and growth.
• The APP and PEPP portfolios are declining as the Eurosystem no longer reinvests principal payments from maturing securities.
• The Governing Council confirmed it is not pre-committing to a particular rate path and will proceed meeting by meeting.

Executive summary

The ECB's Governing Council decided on 29 October 2026 to keep its three key interest rates unchanged. The deposit facility rate stays at 2.50%, the main refinancing operations rate at 2.65%, and the marginal lending facility rate at 2.90%. The…

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