Mainz: ECB interest rates are heading into a decisive stretch, with the Governing Council due to announce its next decision on 29 October 2026 at 14:15 CET. The central bank raised all three key rates by 25 basis points on 10 September, a move that took the deposit facility rate to 2.50 percent.

The September decision on ECB interest rates was unanimous, and the new rates took effect on 16 September. The deposit facility now stands at 2.50 percent, the main refinancing operations rate at 2.65 percent and the marginal lending facility at 2.90 percent. The path this year has been uneven. The deposit rate sat at 2.00 percent until June, rose to 2.25 percent on 11 June, held steady on 23 July and moved up again in September.

President Christine Lagarde has refused to promise what comes next. At the September press conference she said the ECB is not pre-committing to a particular rate path. On 28 September she told the European Parliament that long-term rates have risen notably and that higher yields will slow growth, a remark that points to concern about the cost of credit as well as inflation.

Inflation gives the Governing Council plenty to weigh. Eurostat’s final figures show euro area inflation at 3.8 percent in September, up from 3.2 percent in August, with energy the main driver. Inflation excluding energy stood at 2.3 percent, up from 2.1 percent, so the pressure is not confined to fuel and power. A rise that stays in energy can fade, while a broader rise points to second-round effects and keeps ECB interest rates higher for longer.

Timing makes the October meeting awkward. The Eurostat flash estimate for October is due on 4 November, which is after the decision, and the next set of staff projections arrives only at the meeting of 16 and 17 December. Policymakers will therefore decide on 29 October with the September inflation data and their own judgement, not with the latest projections.

The choices on ECB interest rates are narrow. The Council can pause to see how the September hike feeds through to loans and deposits, or it can raise rates again to signal that it will not accept a lasting overshoot. A pause would suit those worried about growth, while a second hike would reassure those who fear that inflation expectations are drifting.

For households and firms, the effect runs through mortgages, business loans and savings. Higher ECB interest rates raise borrowing costs for variable-rate borrowers quickly, while savers see slower gains. Governments that are financing larger defence and energy budgets will also feel the move through higher bond yields.

The 29 October announcement will show whether the Council sees September as a one-off correction or the start of a longer tightening cycle. Until then, ECB interest rates remain the key variable for anyone planning investment, borrowing or public spending in 2027.