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ECB Meets Thursday: Why a Hold at 2.50% Is Expected After Two Hikes, and Why Markets Still See December
- The ECB announces its decision on Thursday, October 29 at 14:15 CET (9:15 a.m. ET). Christine Lagarde's press conference follows at 14:45 CET.
- The deposit facility rate is 2.50% after hikes in June and September 2026.
- Analysts expect a hold. A survey by FinChiefs found 32 of 32 research houses expect no change, and ECB Watch put the odds of no change at about 96%.
- Swaps priced roughly an 80% chance of a 25 bp hike in December, according to market reports, which would take the deposit rate to 2.75%.
- The ECB's bank lending survey showed mortgage demand fell sharply in the three months to September as rates rose.
What happens Thursday
The European Central Bank announces its interest rate decision on Thursday, October 29 at 14:15 CET (9:15 a.m. ET). President Christine Lagarde speaks at 14:45 CET.
The deposit facility rate is 2.50%. The ECB raised rates in June and again in September 2026, reversing course after its long cutting cycle, because surging energy costs pushed inflation back up.
Thursday is expected to be a pause. A FinChiefs survey found 32 of 32 research houses expect no change, and ECB Watch put the odds of a hold at about 96%.
Why pause now?
- Two hikes need time to work. Rate changes take months to feed into lending and spending.
- Credit is already tightening. The ECB's own bank lending survey showed mortgage demand fell sharply in the three months to September as borrowing costs rose and banks tightened standards.
- December brings new forecasts. The ECB publishes staff projections four times a year, including December. Many analysts think it prefers to decide on another hike with fresh numbers in hand.
Fund manager Louis Gargour summed up the view in comments reported by Yahoo Finance: the ECB "has largely done what was required to combat European inflation."
Why December is still live
Inflation hasn't cooperated. Eurozone inflation hit 3.8% in the latest reading, mostly because of energy. ECB policymakers have warned that high gas and oil prices could cause "second-round effects," where companies and workers push up prices and wages to catch up.
That's why swaps still priced roughly an 80% chance of a December hike, according to market reports. FXStreet's preview expects a final quarter-point hike in December, taking the deposit rate to 2.75%. Read our coverage of eurozone inflation at 3.8%.
What to watch from Lagarde
- Data dependence vs. guidance. Lagarde is expected to keep all options open. Any hint that the hiking cycle is done would hit the euro.
- France. French bond yields have been under pressure on budget worries. Questions about France, and whether the ECB would step in to calm bond markets, are likely. See France's debt and the euro.
- Energy. Brent crude was near $114 on Tuesday. How the ECB judges the oil shock matters more than anything it does on rates this week.
How markets are positioned
European stocks rose for a second day on Tuesday. The Stoxx 600 gained about 0.5% and is up roughly 8% this year, versus about 12% for the S&P 500. Germany's DAX rose 0.8%. The FTSE 100 fell 0.8%, dragged down by HSBC (our report) and Reckitt.
The euro traded around $1.11 against the US dollar.
What it means for you
Mortgages in the eurozone: Variable rates move with ECB policy. Fixed rates follow bond yields. With a December hike possible, borrowers renewing soon may want to lock in.
European stocks: Banks tend to benefit from higher rates. Real estate and utilities tend to suffer. For North American investors, a broad international ETF already gives you balanced European exposure.
The euro: A hawkish ECB supports the euro, which raises the value of European holdings for investors in US or Canadian dollars.
Our explainer on how ECB rates affect your investments has more.
What to watch next
- Thursday, October 29: ECB decision and press conference.
- End of October: Eurozone flash GDP for the third quarter.
- Early November: Flash October inflation.
- December 17: Next ECB meeting, with new projections.
Frequently asked questions
When is the ECB meeting in October 2026?
The ECB's Governing Council announces its decision on Thursday, October 29, 2026, at 14:15 Central European Time (13:15 GMT, 9:15 a.m. Eastern). President Christine Lagarde's press conference begins 30 minutes later.
What is the ECB deposit rate now?
The deposit facility rate is 2.50%. The ECB raised it by a quarter point in June and again in September 2026 as energy prices pushed eurozone inflation higher.
Will the ECB raise rates on October 29, 2026?
A hike is not expected. All 32 research houses in a FinChiefs survey expected a hold, and market pricing put the probability of no change at about 96% heading into the meeting.
Will the ECB hike in December 2026?
Markets lean that way. Swaps priced roughly an 80% chance of a quarter-point hike at the December 17 meeting, which would take the deposit rate to 2.75%. The ECB will also have new staff projections in December, which is why many analysts expect it to wait until then.
What does the ECB decision mean for European stocks?
A hold is priced in. Bank stocks benefit from higher rates through wider lending margins, while real estate and utilities tend to suffer. The bigger driver for European markets this week is earnings: roughly 30% of Stoxx 600 companies report.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 28, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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