Crédit Mutuel AM: The ECB remains in a comfortable position

Crédit Mutuel AM: The ECB remains in a comfortable position

29 oktober 2025

ECB

By François Rimeu, Senior Strategist, Crédit Mutuel Asset Management

With inflation remaining close to the 2% target in September, the European Central Bank (ECB) is expected to keep its monetary policy unchanged at its meeting on Thursday.

Its president, Christine Lagarde, is likely to reiterate that the ECB will only intervene in the event of significant and lasting deviations from its 2% inflation target, stressing that a slight overshoot does not necessarily justify a change in key interest rates.

Our expectations:

  • The deposit facility rate is expected to remain at 2%, supported by resilient growth and controlled inflation.
  • The ECB will likely continue its “meeting by meeting” approach, adjusting its policy according to available data, its assessment of inflation and growth prospects, and associated risks.
  • Lastly, during her press conference, Christine Lagarde is expected to stress that inflation remains well oriented, risks are balanced and the domestic economy continues to show resilience.

In conclusion:

The ECB is expected to maintain a wait and see stance until its next round of economic forecasts are updated in December, including the publication of inflation projections for 2028.

This meeting should not be a surprise: the decision is widely anticipated by markets and is unlikely to trigger any significant reactions.The upcoming quarterly Bank Lending Survey (BLS), due two days before the meeting, will be a key input in assessing how monetary policy is being transmitted to the real economy. Its results could pave the way for a further rate cut in 2026.

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