Home Insights Macro views October ECB meeting: Steady rates, in a “good place”
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October ECB meeting: Steady rates, in a “good place”

Market response

October 30, 2025 | 2 min read
Magdalena Ocampo
Market Strategist
Christian Floro, CFA, CMT
Market Strategist
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As expected, the European Central Bank (ECB) held policy rates steady today, extending its pause in the easing cycle. Rates on the deposit facility, main refinancing operations, and the marginal lending facility remain at 2.00%, 2.15%, and 2.40%, respectively.

With economic activity continuing to grow, ECB President Christine Lagarde emphasized that the central bank is in a very good place and will remain attentive to any emerging risks to ensure it stays there.

Recent economic developments

Growth: Despite weakness in manufacturing, which remains pressured by trade uncertainty and a stronger euro, slightly stronger than expected growth was driven by a resilient services sector. Consumer fundamentals also remain supportive, with real incomes rising, unemployment near historic lows, and solid household balance sheets, suggesting there’s room for increased spending. Looking ahead, the EU-U.S. trade deal over the summer, the ceasefire in the Middle East, and today’s announcement of progress in the U.S.-China trade negotiations, have lessened downside risks to growth.

Inflation: While inflation remained relatively firm in September, hovering just above the ECB’s 2% target, Lagarde expressed confidence in the path of inflation, citing that its outlook is broadly unchanged. Still, symmetrical risks to inflation remain, with supply chain disruptions, stronger consumer demand, or climate-related supply shocks having the potential to push prices higher.

Policy outlook

With resilient economic activity and monetary policy transmission remaining effective, Lagarde noted that the ECB is successfully navigating the broad range of uncertainties to its outlook. Indeed, with positive developments in the trade and geopolitical environment, the risk backdrop has tilted more positively. Fiscal policy should also continue to play an important role, with defense and infrastructure spending, particularly in Germany, helping to support the broader outlook.

Yet, with risks still on the horizon, the ECB continued to reiterate its data-dependent, meeting-by-meeting approach, remaining committed to keeping policy properly calibrated. That said, while further easing is unlikely for now, the ECB hasn’t closed the door on rate cuts should conditions deteriorate.

Macro views
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Views and opinions expressed are accurate as of the date of this communication and are subject to change without notice. This material may contain ‘forward-looking’ information that is not purely historical in nature and may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

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