The European Central Bank kept borrowing costs unchanged on Oct. 29, citing upside inflation risks and downside growth risks from rising energy prices across the euro area.
The deposit rate remains 2.50%; the refinancing rate is 2.65%, and the marginal lending rate is 2.90%.
Euro-area inflation rose to 3.8% in September from 3.2% in August, while energy inflation increased to 18.9% from 14.3%, ECB data showed. The central bank said core price pressures had changed little and that it had not seen a meaningful wage response to higher energy prices.
The ECB said a larger or longer-lasting energy shock could further lift inflation and weigh on growth. It also warned that higher energy costs could erode household purchasing power and weigh on spending and investment.
CNA reported the euro at about $1.1167, up 0.13%. The outlet also said the currency had earlier reached its weakest level against the dollar since May. The ECB’s daily reference rate on Oct. 29 was $1.1130 per euro, a separate fixing from CNA’s market quote. EconoTimes separately reported a 0.14% decline against sterling after the same decision.
The Governing Council said it would reassess policy at each meeting based on new data, its inflation outlook and its view of how policy was affecting the economy. It did not promise a sequence of rate moves.
