30 October 2025
If you are covering the latest European Central Bank’s decision to hold interest rates, please find below a comment from CJ Cowan, portfolio manager at Quilter:
“Today’s ECB decision was relatively uneventful. Overwhelming consensus was for no change to interest rates, and that’s exactly what happened. In recent months Christine Lagarde has expressed that she is happy with the current policy setting, which seems reasonable given trends in economic data. Activity appears to be improving with PMI readings on the up, inflation is roughly at target, and unemployment is the lowest the bloc has ever seen.
“The ECB currently forecasts modestly below target inflation in 2026 and 2027, which leaves the door ajar to another rate cut, and investor surveys tend to show around half of respondents expecting further action. However, there isn’t much in the current data that screams for further policy easing, particularly given the positive fiscal impulse from Germany, although GDP nowcasts are just as anaemic as ever.
“Downside risks to growth and inflation exist from a stronger Euro and trade tensions between the US and China, which may lead to oversupply as the Chinese dump goods in Europe that they can no longer sell in America. With that in mind, the purported deal between the US and China overnight could soften some of these risks making it more likely the ECB remains on hold for the foreseeable future.”
