ECB Holds Deposit Rate at 2.50% as Lagarde Says She Will Step Down

The European Central Bank left its three key interest rates unchanged on Thursday, Oct. 29, keeping the deposit facility rate at 2.50%, the ECB said in a statement at 14:15 CET (13:15 GMT). The decision came about three hours after the ECB said President Christine Lagarde will step down on Feb. 7, 2027.

The main refinancing rate stays at 2.65% and the marginal lending rate at 2.90%, the ECB said.

Updated Oct. 29 after the press conference: Lagarde said the Governing Council "debated whether a hike was appropriate" but "unanimously decided that we were well positioned enough at this stage to hold," according to the ECB's transcript. She said that unless there is a major development before the December meeting, "the direction of travel is quite clear." She said she is leaving early, rather than at the end of her term in October 2027, because she wants "the freedom of speech, the freedom of expression and the freedom to engage on matters that are not monetary policy matters."

Did the ECB change interest rates today?

No. The Governing Council "decided to keep the three key ECB interest rates unchanged," the ECB said.

ECB rate	Level after Oct. 29 decision
Deposit facility	2.50% (unchanged)
Main refinancing operations	2.65% (unchanged)
Marginal lending facility	2.90% (unchanged)

Source: ECB monetary policy decisions, Oct. 29, 2026.

What did the ECB say about energy and inflation?

The ECB said energy prices "have continued to rise, posing upside risks to the inflation outlook and downside risks to the growth outlook." It said underlying inflation "has remained broadly stable so far" and wages "do not show a material response at this stage."

The bank warned that "the increased magnitude and duration of the energy shock" and its second-round effects "are likely to drive up inflation and lower growth." It also said financing conditions have tightened since its last meeting, which is likely to weigh on both inflation and growth.

The ECB repeated that it will take a "data-dependent and meeting-by-meeting approach" and "is not pre-committing to a particular rate path." Brent crude, the global oil benchmark, traded at $114.15 a barrel at about 12:45 GMT, according to Yahoo Finance data, down from Wednesday's settlement of $115.32. Follow the oil story on our energy market news page.

Why is Lagarde stepping down?

The ECB did not give a reason. In a separate release at 11:00 CET, it said Lagarde informed the Governing Council and European Council President António Costa that she will leave on Feb. 7, 2027. The European Council will appoint her successor under Article 283 of the EU treaty. The Governing Council gave her "a long standing ovation," the ECB said.

The ECB's calendar shows two more policy meetings before that date: Dec. 16–17 and Feb. 3–4, 2027.

How did the euro and Bunds react?

The euro slipped after the decision. EUR/USD fell to about $1.1116 at 13:19 GMT from $1.1135 at 13:15 GMT, according to Yahoo Finance one-minute data. That was down about 0.1% from Wednesday's close of $1.1130. The euro barely moved after the Lagarde announcement, trading between $1.1136 and $1.1141 from 9:55 to 10:10 GMT.

German bonds rallied. The 10-year Bund yield was about 3.34% shortly after the decision, down 4 basis points on the day, and the 2-year yield was 3.04%, down about 6 basis points, according to Trading Economics. France's 10-year yield fell about 5 basis points to 4.89%. Yields move opposite to prices.

For more on euro-area borrowing costs, see our story on France's 10-year yield hitting its highest since 2002. Find more central bank coverage in our economy section.