October 26, 2023
On October 26, 2023, the Governing Council made the decision to keep the three key interest rates set by the European Central Bank (ECB) unchanged. Therefore, the interest rates on the main refinancing operations, the marginal lending facility, and the deposit facility will all remain unchanged at 4.50%, 4.75%, and 4.00%, respectively.
The recent information aligns with previous assessments of the medium-term inflation outlook. Inflation is expected to remain elevated for an extended period, driven by robust domestic price pressures. However, there was a significant drop in inflation in September, partly due to favourable base effects, and measures of underlying inflation are showing signs of moderation. The past interest rate increases implemented by the Governing Council are effectively influencing financing conditions, which is reducing demand and contributing to lowering inflation.
In ensuring that inflation returns to its 2% medium-term target in a timely manner, the Governing Council will continue to follow a data-based approach in determining the appropriate level and duration of its monetary policy restriction. As such, its monetary policy stance will continue to be in accordance with incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. Therefore, the Governing Council’s future decisions will ensure its policy rates will be set at sufficiently restrictive levels for as long as necessary.
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