ECB keeps rates on hold as expected
By Michele Maatouk
Date: Thursday 30 Oct 2025
(Sharecast News) - The European Central Bank kept interest rates on hold on Thursday at 2%, as widely expected.
The interest rates on the main refinancing operations and the marginal lending facility were kept at 2.15% and 2.40% respectively.
The ECB noted that inflation remains close to its 2% medium-term target and said the Governing Council's assessment of the inflation outlook was broadly unchanged.
"The economy has continued to grow despite the challenging global environment," the ECB said.
"The robust labour market, solid private sector balance sheets and the Governing Council's past interest rate cuts remain important sources of resilience. However, the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions."
Preliminary data released earlier by Eurostat showed that eurozone GDP increased by 0.2% in the third quarter. This was above expectations for 0.1% growth, mainly thanks to strong performances in Spain and France.
Morgan Stanley said: "For now, the ECB is in wait-and-see mode, especially on non-projection meetings. The Council's assessment that most measures of underlying inflation suggest that inflation will settle at around the 2.0% target on a sustained basis was reconfirmed. Inflation is described as remaining 'close to the target'. The economy remains resilient, but outlook is still uncertain."
It noted that the ECB did not commit to a particular rate path and reiterated its meeting-by-meeting approach.
"Given that rates are now considered as neutral by most Governors, further rate cuts need to clear a higher bar. The data the Governing Council observed since September had been mostly on the softer side (for instance from the BLS). Yet, today's better than expected Q3 growth data, as well last week's PMIs, support the ECB's narrative of resilient growth.
"The emerging picture is mixed. Further rate cuts will be guided by underlying inflation, the strength of transmission of monetary policy, and inflation projections as well as the risks surrounding them."
On Wednesday, the US Federal Reserve cut interest rates by 25 basis points as widely expected, and announced the end of quantitative tightening.
However, chair Jerome Powell struck a more hawkish tone on the outlook, saying that a further reduction of the policy rate at the December meeting was "not a foregone conclusion".
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