The ECB left interest rates unchanged despite a spike in inflation

At its meeting on Thursday, October 29, the European Central Bank decided to keep interest rates unchanged, as the market had expected, according to CNBC. The ECB’s key rate—the deposit rate—remained at 2.5% following a 25-basis-point increase in September.

In its statement, the regulator maintained its previous assessment of the main risks: it acknowledges that "an intensification and prolongation of the energy shock are likely to lead to an acceleration in inflation and a slowdown in economic growth." CNBC notes that the pace of price increases in the region accelerated to a three-year high in September.

In addition, the ECB stated that financing conditions had tightened since its previous meeting. This led investors to lower their expectations regarding further monetary policy tightening.

Following the regulator’s decision, the euro continued to weaken, losing 0.4% and falling to a new 17-month low. Eurozone government bonds continued to rise in price. The Stoxx 600 stock index maintained its gains, rising by about 1%.

This news story is being updated.

This article was AI-translated and verified by a human editor