Interest rates unchanged. Experts comment on ECB decision
5 FEB, 2026
By Joanna Piwko from RankiaPro Europe
The European Central Bank (ECB) has once again decided to keep interest rates unchanged. The deposit rate remains at 2.0%, and the refinancing rate at 2.15%. That's what market had expected. What do experts think of this decision?
Filippo Alloatti, Head of Financials (Credit) at Federated Hermes
As expected, the ECB left the rate on deposit facility unchanged at 2%. No surprises there. The Governing Council reiterated its familiar mantra of “not pre‑committing to a particular rate path,” which is sensible given recent data points. These include, among others: i) German industrial orders rising sharply for the second consecutive month in December, up 7.8%, and ii) the share of euro‑area banks reporting stronger loan demand on a quarterly basis increasing to 14.2%. As is customary—and in line with the ECB’s mandate—there was no commentary on the strength of the euro, though the topic is likely to surface in what may otherwise be a rather subdued press conference.
Felix Feather, Economist at Aberdeen Investments
The European Central Bank (ECB) has kept its monetary policy unchanged, in line with market expectations and our own forecasts.
The policy statement adhered to the familiar ‘data-dependent, meeting-by-meeting’ approach and reiterated that ‘the Governing Council is not pre-committing to a particular interest rate path,’ even as the appreciation of the euro has tilted the balance of risks toward a slightly softer inflation trajectory.
We believe that the disinflationary impulse from a stronger euro relative to the ECB’s previous expectations will be relatively modest. Recent movements in the euro against a broad, trade-weighted basket have not been particularly pronounced, and their pass-through to consumer prices tends to be fairly limited.
Taking all of this into account, we maintain our forecast that interest rates will remain unchanged until 2026.
Irene Lauro, Senior European Economist at Schroders
The euro area’s growth continues to outperform expectations, with domestic demand gaining momentum as lower interest rates and fiscal support feed through to the economy. It is true that headline inflation has fallen below target, but the ECB is unlikely to place much weight on this given the volatility of energy prices. Instead, we believe policymakers will remain focused on services inflation, which is still abnormally high and is expected to be exacerbated by the end of the slowdown in wage growth this year. Today’s decision confirms our view that the ECB’s next rate move will be upwards rather than downwards.
Massimo Spagnol, Fixed Income Manager at Generali Asset Management (part of Generali Investments)
The message is clear: a strongly data-dependent approach, focused on closely assessing developments in inflation, wages and economic growth. At the same time, it signals a stance of patience and short-term stability.
Markets are currently pricing in no changes to monetary policy throughout 2026, in line with inflation projections. Christine Lagarde highlighted that the economy remains resilient (+0.3% in the final quarter of 2025), albeit in a challenging global environment. Factors supporting growth include the effects of monetary policy, low unemployment (6.2% in December), strong private-sector balance sheets, and the gradual increase in public spending on defence and infrastructure. However, the outlook remains uncertain, particularly due to ongoing volatility in global trade policies and geopolitical tensions.
Inflation fell to 1.7% in January, from 2.0% in December and 2.1% in November. Looking ahead, inflation forecasts are likely to become more complex and uncertain. The external environment remains challenging, given rising trade tariffs and the appreciation of the euro over the past year. A stronger euro could push inflation below current expectations, while increased spending on defence and infrastructure could add inflationary pressure over the medium term.
The need to urgently strengthen the euro area and its economy in the current geopolitical context was also emphasised. Governments should prioritise fiscal sustainability, strategic investments and structural reforms that support growth. (...) Overall, market reaction following the meeting was broadly flat.
