The Economics and Statistics Division maintains archives of previous publications for accountability purposes, but makes no updates to keep these documents current with the latest data revisions from Statistics Canada. As a result, information in older documents may not be accurate. Please exercise caution when referring to older documents. For the latest information and historical data, please contact the individual listed to the right.
<--- Return to Archive
For additional information relating to this article, please contact:
October 29, 2026EUROPEAN CENTRAL BANK MONETARY POLICY The European Central Bank (ECB) announced today that it would maintain the three key ECB interest rates. The interest rates on the deposit facility, main refinancing operations and the marginal lending facility will remain at 2.50%, 2.65%, 2.90% respectively.
The European economy grew in Q3 of 2026, driven by contributions from AI-related activity in digital services. Services rebounded after slowing at the start of the Middle East conflict. AI-related investment supported manufacturing, digital services and exports, while government spending on infrastructure and defence also boosted activity. Higher energy prices have dampened consumer confidence, and rising financing costs are expected to slow growth.
Unemployment unchanged at 6.4% in August. Growth in employment and the labour force remains subdued, while productivity has gradually picked up.
Inflation increased to 3.8% in September, from 3.2 % in August. Energy prices were up to 18.9% from 14.3% in August. Food price inflation increased to 1.3% in September. Excluding energy, inflation eased to 2.3% in September, from 2.1 % in August. Short-term inflation expectations have risen, but longer-term expectations remain near 2%, supporting a return to target over the medium term.
The outlook remains uncertain, with upside risks for inflation and downside risks for economic growth. The war in the Middle East adds significant volatility to the global policy environment. If prolonged, energy prices are expected to increase further and for longer. These factors would erode real incomes even more and make firms and households more reluctant to invest and spend. Additional frictions in international trade could also further disrupt supply chains, reduce exports and weaken consumption and investment. Extreme weather events, and the unfolding climate and nature crises more broadly, could drive up food prices by more than expected.
The asset purchase programme (APP) and Pandemic Emergency Purchase Programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests principal payments from maturing securities.
The Governing Council notes it is determined to see inflation stabilise at its 2.0% medium-term target. The Transmission Protection Instrument, an ECB backstop that allows targeted purchases of sovereign bonds when financing conditions diverge unjustifiably across member states, is also available to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across all euro area.
Source: European Central Bank: Monetary policy decisions (Press Release); Monetary Policy Statement (Press Conference)
<--- Return to Archive
