ECB holds interest rates steady after September increase

The European Central Bank kept its three main interest rates unchanged at its October meeting.

The deposit rate remains 2.50%, the main refinancing rate 2.65% and the marginal lending rate 2.90%.

The decision followed a 0.25 percentage-point increase at the previous meeting.

Rising energy prices are increasing inflation risks while also threatening to slow economic growth, the bank said.

It noted that the full effects of the energy shock have not yet appeared, while underlying inflation has been broadly stable and wages have shown no clear response so far.

Tighter financing conditions are also weighing on the outlook, and the bank said it will base future decisions on incoming data rather than commit to a set rate path.

Lagarde said a December increase remains possible, with the decision depending on data due over the next six weeks.