ECB keeps key interest rates unchanged after September increase

The announcement

The ECB Governing Council left its three key policy rates unchanged on 29 October. The deposit facility rate remains 2.50%, the main refinancing operations rate 2.65% and the marginal lending facility rate 2.90%.

The decision followed the 25 basis-point increase announced in September. The ECB said higher energy prices were creating upside risks to inflation and downside risks to growth, while financing conditions had tightened.

What it means for account customers

Savings rates are not mechanically equal to the ECB deposit facility rate. Banks set retail deposit pricing according to their own funding needs, competition, product design and promotional strategy, so the spread between policy rates and a specific savings account can be substantial.

Our view: for savers, the useful response is to compare the actual annual rate, how long it lasts, balance caps and withdrawal conditions rather than infer a return from the policy rate alone. For borrowers, the policy environment can influence funding costs but does not determine the price of an individual loan.

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