The ECB kept rates unchanged as energy-driven inflation risks persist, while the central bank continues to reduce its APP and PEPP portfolios without reinvesting maturing securities.
The ECB left rates unchanged on 29 October 2026 and continues to shrink its APP and PEPP portfolios without reinvesting maturing principal, adding upward pressure on euro-area yields. Energy-driven inflation risks and tighter financing conditions reinforce that pressure, though the Transmission Protection Instrument could limit disorderly moves.
The ECB is no longer reinvesting principal from maturing APP and PEPP securities, and energy prices pose upside inflation risks.
The Transmission Protection Instrument is available to counter unwarranted, disorderly market dynamics that threaten monetary policy transmission across euro area countries.
The ECB kept its deposit rate at 2.50%, main refinancing rate at 2.65% and marginal lending rate at 2.90% on 29 October 2026. Rising energy prices pose upside inflation risks, which argues against near-term easing and supports the euro, but the same shock creates downside growth risks and tighter financing conditions, leaving the currency's direction mixed.
It kept the deposit facility at 2.50%, main refinancing operations at 2.65% and the marginal lending facility at 2.90%.
It says energy prices have continued to rise, posing upside risks to inflation and downside risks to growth.
The European Central Bank maintained its key interest rates on October 29, 2026, keeping the deposit facility at 2.50%, main refinancing at 2.65%, and marginal lending at 2.90%. Policymakers cited rising energy prices as a dual threat, creating upside inflation risks while simultaneously dampening economic growth prospects. The bank remains committed to a data-dependent, meeting-by-meeting approach to ensure inflation returns to its 2% medium-term target.
The Governing Council kept the deposit facility rate at 2.50%, the main refinancing operations rate at 2.65%, and the marginal lending facility rate at 2.90%.
The ECB is allowing its APP and PEPP portfolios to decline at a predictable pace by no longer reinvesting principal payments from maturing securities.