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The European Central Bank (ECB) held its key interest rates unchanged following the February meeting of the Governing Council, in line with Cebr projections.
This marks the fifth consecutive hold, despite a below-target inflation reading of 1.7% in January, the lowest level since 2021.
The decision to hold rates also comes despite a recent Euro rally against the dollar, which is expected to add disinflationary pressure through cheaper imports and weigh on growth by making the bloc’s exports more expensive. Even so, the Eurozone continues to show resilience amid tariffs and geopolitical uncertainty.
Today’s decision reflects a cautious stance by the ECB given upside risks to inflation amidst stronger domestic consumption and impending fiscal easing. Nevertheless, Cebr predicts that rates will be held until at least the second half of 2026.
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