5 February 2026
If you are covering the ECB’s decision to hold interest rates, please see the following comment from Lindsay James, investment strategist at Quilter:
“The European Central Bank’s decision to maintain its hold on interest rates had long since been priced in. With inflation now well below the 2% target and economic indicators broadly stable, the central bank has little incentive to adjust its position in the near term.
“Headline inflation fell to 1.7% in January, largely thanks to lower energy prices, while core inflation stands at 2.2%. The most recent ECB staff projections saw inflation easing to 1.9% in 2026 and 1.8% in 2027, strengthening the case for holding rates for the foreseeable future. What's more, despite the ongoing external pressures, growth also remains steady. GDP rose 0.3% in the final quarter of 2025, and ECB staff growth projections expect eurozone GDP to reach 1.2% in 2026, and 1.4% in 2027.
“With interest rates already far lower than its peers, inflation closely aligned with target and economic growth relatively steady, the ECB’s policymakers can afford to remain patient. For now, and likely for the remainder of the year, the ECB is in a comfortable ‘wait‑and‑see’ position.”
