European Central Bank policymakers are ready to raise interest rates again in December if inflation prospects do not improve, Bloomberg reported, citing insider sources. No final decision has been made. The ECB declined to comment on the reports.
The central bank held its deposit rate at 2.5 percent at its most recent Thursday meeting, skipping a third hike since the Iran war disrupted energy markets. Inflation has nearly doubled the ECB’s 2 percent target. Our own measurement puts the ECB main refinancing rate at 2.50 percent as of 00:46 GMT on 30 October 2026, in force since 29 October.
Lagarde signals tightening pause
Christine Lagarde said a rate hike was discussed at this week’s intensive meetings, but policymakers kept the deposit rate unchanged. She described inflation risks as tilted upward and growth risks as tilted downward.
Lagarde also stressed that tighter financial conditions and the limited pass-through of the energy shock were shaping the outlook. She described the direction of policy rates as clear.
Analysts see tightening cycle ending
Bloomberg analysts David Powell and Simona Delle Chiaie said the Governing Council is preparing to end the tightening cycle. They left open a small door for a December hike.
The 2.5 percent level is the upper bound of the range considered neutral for monetary policy. Lagarde has also announced she will leave her post early, with a step-down reported for February 2027.
Related: Bank of Russia holds key rate at 14% as inflation stays elevated · Bank of Korea holds rate at 3% as inflation stays elevated
Source: European Central Bank
