ECB Holds Deposit Rate at 2.00% as Energy Shock Raises June Hike Expectations

The ECB Governing Council released its October monetary-policy decision on Thursday, 29 October 2026 at 13:45 CET. The deposit facility rate was held at 2.00%, the main refinancing operations rate at 2.15%, and the marginal lending facility rate at 2.40%. The deposit facility rate has been at its current level since June 2025, capping an easing cycle that cut rates eight times from 4.00% over roughly a year. Three Governing Council meetings earlier in 2026 had already left rates untouched. ECB President Christine Lagarde followed the written decision with a press conference in Frankfurt, where her unscripted remarks drew close attention from traders. Markets now fully price a 25-basis-point increase at the 11 June 2026 meeting — which would lift the deposit facility rate to 2.25% — after a war in the Middle East pushed energy prices higher and prompted ECB staff to raise their 2026 eurozone inflation forecast to around 2.9%, up from 2.6% in the March projections. The ECB targets inflation at 2% over the medium term, measured by the Harmonised Index of Consumer Prices. The central question for the second half of 2026 is whether sustained energy-driven price pressures push the Governing Council into a brief tightening phase beginning in June.