Overview
- The ECB left its key rates unchanged with the deposit rate at 2.50 percent following a policy decision announced on Thursday, while confirming President Christine Lagarde will step down on 7 February 2027.
- Markets and many economists now expect the ECB could raise rates again in December if the energy shock keeps inflation elevated, a risk highlighted by models that project core inflation rising toward or above 3 percent into 2027.
- Household borrowing costs have jumped: new consumer loan rates in Germany average about 8.99 percent and surveys show a majority of banks expect further rate rises and tighter lending standards in Q4 2026.
- Banks and comparison sites report higher saver offers, with time-limited Tagesgeld promotions up to about 4.5 percent and ten-year Festgeld averages near 3.22 percent, though many top rates are conditional or temporary.
- Stress in bond markets, notably wider French sovereign spreads and political tensions, constrains the ECB’s room to tighten aggressively and leaves policymakers weighing inflation control against financial stability risks.