Rate Freeze in Frankfurt Keeps Portuguese Mortgage Bills on Hold

ECB Leaves Borrowing Costs Unchanged for Third Straight Meeting

The European Central Bank (ECB) opted to keep its three key interest rates steady at its late-October policy meeting, extending the pause that began in July.

• Deposit Facility: 2.00 %• Main Refinancing Operations: 2.15 %• Marginal Lending Facility: 2.40 %

Why the Governing Council Hit the Hold Button

President Christine Lagarde said the decision reflects a picture in which inflation has "inched close enough" to the 2 % medium-term target, while economic growth remains positive but fragile. According to the latest staff projections, headline inflation is expected to average 2.1 % in 2025, ease to 1.7 % in 2026 and settle around 1.9 % in 2027. Underlying price pressures, which strip out energy and food, should follow a similar downward path.

On growth, the ECB’s economists see euro-area GDP expanding by 1.2 % next year, slipping to 1.0 % in 2026 before rebounding slightly to 1.3 % in 2027. The Council noted that a resilient labour market and healthier private-sector balance sheets are offsetting the drag from weaker global trade and higher energy costs.

Risks the Central Bank Is Watching

Geopolitical tensions – Ongoing trade frictions and renewed supply-chain bottlenecks, particularly in advanced chips and rare-earth minerals, could add price pressure.

External demand – Slower growth in major trading partners would weigh on exports.

Financial conditions – Previous policy easing is still working its way through the economy; the full effect on credit and investment is not yet visible.

The Governing Council repeated that future adjustments will be “data-dependent” and decided against offering forward guidance on a precise rate path.

What It Means for Portugal

• Variable-rate mortgages – Most Portuguese home loans are indexed to 6- or 12-month Euribor benchmarks, which tend to shadow the ECB deposit rate. With no change in the policy rate, households can expect instalments to remain broadly flat in the coming review cycle.• Sovereign funding – Portuguese 10-year bond yields hovered just above 2.9 % after the announcement, virtually unchanged on the day, suggesting investors had already priced in the pause.• Corporate credit – Stability in short-term rates offers breathing room to small and mid-sized firms whose credit lines reset quarterly.

Next on the Calendar

The ECB’s final policy discussion of the year is scheduled for mid-December in Frankfurt. Between now and then, policymakers will parse incoming wage data, the November flash inflation reading and updated business surveys to determine whether the current plateau in rates should extend into 2026.