The European Central Bank (ECB) has frozen the main interest rates. During the meeting held in Florence, the decision was made to set the rates on deposits at 2%, the rate on refinancing at 2.15% and the rate on marginal loans at 2.40%.
The ECB, through the official note, announces that the economy has continued to grow despite the difficult global context. At the same time, and here is the sore point, the outlook remains uncertain, especially due to current trade disputes and global geopolitical tensions. Thus the need, according to the Governing Council, to ensure that inflation stabilizes around 2% in the medium term.
Rates still unchanged
The Governing Council of the ECB met on Thursday in Florence, instead of in the usual headquarters in Frankfurt. On this occasion, decisions were made on rates and the digital euro.
Experts do not say they are surprised by the fact that the ECB has confirmed the freezing of the three main reference rates. It is the third consecutive time that the institute has decided to keep them unchanged, while inflation remains close to the medium-term target of 2%.
The three rates therefore remain unchanged at:
- 2% for deposits;
- 2.15% on major refinancings;
- 2.40% on marginal loans.
ECB cautious: the reasons for the decision
It is not yet time to reduce the cost of money. The main reason remains inflation: in the Eurozone it is close to 2%, but the latest data showed a slight increase. Consumer prices rose by 2.2% on an annual basis (September data), compared to 2.1% in August and 2% in July. Core inflation also rose, standing at 2.4% for food and energy in September, after 2.3% in August.
Despite this, the pressures resulting from US tariffs, the war in Ukraine and the global geopolitical situation, the leaders of the ECB and President Christine Lagarde have declared that European monetary policy remains in a solid position. At the moment, in fact, US tariffs have had a limited impact on inflation and growth.
Despite solid private balance sheets and a still expanding economy, the ECB maintains a prudent approach. In the note published after the meeting we read that the prospects remain “still too uncertain”:
The Governing Council is determined to ensure that inflation stabilizes at the 2% target over the medium term. To define the appropriate monetary policy stance, it will follow a data-driven approach, taking decisions on a meeting-by-meeting basis.
The ECB calendar: the meeting on 18 December
The next meeting is scheduled for 18 December 2025. It will be an important Governing Council meeting, as the new macroeconomic forecasts, extended to 2028 for the first time, are released.
According to Luke Copley, fixed income client portfolio manager at Columbia Threadneedle Investments, it will be interesting to observe what will happen in 2026. The prospects, he explains, point towards a possible reduction, and not an increase, in rates.
Everything will depend on a weaker economic context and a possible strengthening of the euro in the second half of 2026, with prices falling further. This scenario would offer the ECB some room for maneuver to reduce rates.
Other investors and central bankers also share a cautious analysis: the European economy shows signs of stagnation, although without immediate risks of collapse. According to Kevin Thozet, member of Carmignac’s investment committee, the interventions on public procurement promoted by Mario Draghi, part of the European structural reforms, could also contribute to improving the macroeconomic framework.
