ECB keeps key interest rates unchanged as inflation outlook faces upside risks from energy prices

The European Central Bank held its three key interest rates steady on October 29, 2026, citing that rising energy prices pose upside risks to inflation and downside risks to growth. While underlying inflation has remained stable, headline inflation rose to 3.8% in September from 3.2% in August, driven by a surge in energy inflation to 18.9%. Financing conditions have tightened since the last meeting, weighing on the economic outlook.