ECB leaves interest rates unchanged

FRANKFURT -- The European Central Bank (ECB) announced on Thursday that it would leave its key interest rates unchanged.

The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will remain unchanged at 2.5 percent, 2.65 percent and 2.9 percent, respectively.

Rising energy prices are posing upside risks to the inflation outlook but underlying inflation has remained broadly stable so far, the ECB said in a press release.

"The increased magnitude and duration of the energy shock, as well as the implications for indirect and second-round effects, are likely to drive up inflation and lower growth."

Inflation in the euro area surged in September to 3.8 percent from 3.2 percent in August, hitting a three-year high. The rise in inflation has been driven largely by higher energy prices, according to data released by the European Commission.

The ECB has hiked interest rates twice this year, pushing the interest rate on the deposit facility up to 2.5 percent from two percent.

The ECB insists that it is "well positioned" to navigate the current elevated uncertainty and will still continue to follow its data-dependent and meeting-by-meeting approach to determine its future monetary policy stance.

The ECB is scheduled to publish its latest edition of the staff projections in December.