European Central Bank keeps key interest rate unchanged

Council meeting in Frankfurt ECB keeps key interest rate unchanged As of: October 29, 2026 • 4:18 p.m

As expected, the European Central Bank (ECB) left key interest rates unchanged at 2.5 percent. However, the early retirement of ECB boss Christine Lagarde is causing a lot of discussion.

Despite stubbornly high inflation, the European Central Bank (ECB) is taking a break from interest rates. The key interest rates remain at 2.5 percent. The ECB announced this after its board meeting today. Economists are now expecting another interest rate hike in December.

It was only last September that the monetary authorities raised interest rates and justified this step with high inflation. The inflation rate in the euro area was recently at 3.8 percent, after 3.2 percent in August. The ECB is aiming for a rate of 2.0 percent.

The reason is the high energy prices. more

In general, economists at large banks consider the interest rate break to be justifiable. “The financing conditions for companies have tightened and the economic mood has deteriorated somewhat recently,” says Andreas Bley, chief economist at Volks- und Raiffeisenbanken. The ECB can now wait and see “how prices and the economy develop in the next few weeks,” said Heiner Herkenhoff, managing director of the BdB banking association.

According to experts, the ECB should not take the development lightly. “Hopefully they won’t let France’s budget crisis dissuade them from making an interest rate move at the next meeting in December,” warns Commerzbank chief economist Jörg Krämer. "The higher energy prices are likely to soon begin to affect the prices of other ‌goods and ‌services." And his colleague Ulrich Kater from Deka Bank adds: "It's getting more uncomfortable for the ECB," said Kater. "The cost of living is becoming a political issue."

There have been rumors for a long time, now it is confirmed: ECB boss Lagarde is leaving her post early in February. more

At the subsequent press conference, however, the focus was less on the interest rate decision and more on the early resignation of ECB President Christine Lagarde from her position. The ECB confirmed this in the morning. The move is considered unsurprising. Lagarde only commented on her withdrawal at the end of the press conference. She justified this with the duty of neutrality in this office. “I want to preserve the freedom of free speech,” said Lagarde. "I have a lot to say about the world's problems. My voice can help."

But this also means the race for a successor has broken out. The Dutchman Klaas Knot and the Spaniard Pablo Hernández de Cos are considered future central bank presidents. Bundesbank chief Joachim Nagel is considered largely without a chance, as the chairwoman of the EU Commission, Ursula von der Leyen, is already a German who holds a high European office. “The process has started,” said Lagarde. "There are many candidates. And many who are better than me."

The evening before, the US Federal Reserve had also not touched its key interest rates. The key monetary policy rate remains in the range of 3.75 to 4.00 percent, as the monetary authorities led by Fed Chairman Kevin Warsh announced on Wednesday. However, the decision was not unanimous: the monetary authorities Lisa Cook and Beth Hammack voted in favor of an increase. The central bank admitted that inflation “remains elevated”.

“We assume that the data until the next meeting will support the impression that inflation is too high and is not slowing down,” said Commerzbank economist Bernd Weidensteiner. An interest rate increase of a quarter of a percentage point is therefore expected in December. The central bank raised the key monetary policy rate in September for the first time in around three years to keep stubborn inflation in check.

ECB boss Lagarde resigns early tagesschau24, October 29th, 2026 • 11:00 a.m. ECB key interest rate meeting Christine Lagarde This topic in the program: tagesschau.de | DAX start, ECB outlook, VW figures | 10/29/26 | 9:33 a.m