ECB says rates rose 25 bps in September as inflation hit 3.8%

• The Governing Council raised key ECB interest rates by 25 basis points in September.
• Headline inflation increased to 3.8% in September; core inflation rose to 2.5%.
• The ECB plans a 12-month internal pilot for the digital euro in the second half of 2027.
• More than 30 central banks have expressed interest in EUREP over the past six months.

Christine Lagarde said the ECB Governing Council raised key interest rates by 25 basis points in September, after a similar increase in June. She said headline inflation rose to 3.8% in September.

ECB says rates rose 25 bps in September as inflation hit 3.8%

Action

Lagarde said the Governing Council based its rate decisions on its reaction function. She said the three criteria are the inflation outlook and risks around it, underlying inflation dynamics and the strength of monetary policy transmission.

She also said the Governing Council decided in July on the operational features and onboarding process for the enhanced EUREP, the Eurosystem repo facility for central banks announced earlier this year.

Respondents

The statement was delivered by Christine Lagarde, President of the ECB, at the fifty-fourth meeting of the International Monetary and Financial Committee in IMF Annual Meetings on 17 October 2026.

Effective

The ECB said it will run a 12-month internal pilot in the second half of 2027 for the digital euro. It said adopting the Regulation on the establishment of the digital euro by the end of 2026 is key to making that possible.

Lagarde said Pontes, the Eurosystem’s DLT solution, went live on 21 September. She said more than 30 central banks have expressed interest in EUREP in the past six months.

Penalty

No penalty was announced.