ECB Hits Pause Again as Growth Surprises and Inflation Stays Near Target

With input from CNBC, Bloomberg, and Reuters.

The European Central Bank kept rates on hold Thursday, leaving the deposit rate at 2% for a third straight meeting and signaling it’s broadly comfortable with where policy sits right now.

Why the pause? The data are cooperating. Eurozone GDP grew 0.2% in Q3, a touch better than expected, and inflation ticked up to 2.2% in September from 2.0% — still right around the ECB’s goal. In a statement, policymakers said inflation remains close to target and their view of the outlook is “broadly unchanged.”

President Christine Lagarde called the current stance “a good place,” but not a fixed one. Services are still carrying the economy — think tourism and digital — while manufacturing is being held back by higher tariffs, lingering uncertainty and a stronger euro. The ECB also flagged familiar swing factors: trade frictions and geopolitics could still upset the picture.

Officials have been clear this month that the easing cycle is near its end, if not already there. Markets read the decision as steady-as-she-goes: the euro slipped about 0.3% to $1.157, and bond moves were muted.

With growth proving resilient and inflation hovering near 2%, the ECB is content to wait for more data rather than cut again. Unless the outlook shifts meaningfully, rates look set to stay put for a while.