The European Central Bank (ECB) Governing Council has maintained its three key interest rates, according to an announcement made on October 26, 2023. This decision comes in the face of ongoing domestic price pressures and heightened inflation expectations.
Despite a significant decrease in September’s inflation due to strong base effects, the Council’s primary goal remains to achieve its medium-term target of 2% inflation. The Council believes that maintaining the current rates for an extended period will significantly contribute to achieving this target.
In previous periods, interest rate hikes had a substantial effect on financing conditions, leading to reduced demand and potentially lower inflation. The Council is committed to preserving restrictive ECB interest rates until their inflation objectives are met.
Looking ahead, all monetary policy instruments, even those not discussed during the October 26 meeting, are prepared for adjustment. This state of readiness is intended to ensure a swift return of inflation to the target and smooth implementation of monetary policy transmission.
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