The European Central Bank held its deposit rate at 2.50% as Christine Lagarde said she will step down in February 2027. Markets still price an 82% chance of a December hike, even as bank credit tightens and French consumer confidence hits a 13-year low.
Christine Lagarde will leave the ECB on 7 February 2027, nine months early, after the Governing Council held the deposit rate at 2.50% with no successor named. Source
The European Central Bank left all three key rates unchanged on Thursday: the deposit facility at 2.50%, the main refinancing rate at 2.65% and the marginal lending facility at 2.90%. The hold was consensus. The statement is where the interest lies. The Governing Council said the energy shock is larger and longer than it assumed, flagged upside risks to inflation and downside risks to growth, and noted that financing conditions have tightened since the last meeting. It would not commit to a path. Money markets haven't taken the hint. They still price roughly an 82% chance of a December hike and about three hikes in total by the end of next year, which would take the deposit rate to 3.25%.
