ECB Holds Rates Steady at 2% as Eurozone Growth Resilient into 2027

The European Central Bank maintained its benchmark deposit rate at 2% on February 5, 2026, as economic growth remains resilient despite external disruptions. With inflation easing to 1.7% in January 2026 and below the ECB’s 2% target, the bank judged further rate cuts unnecessary at this juncture. Analysts at Berenberg Bank project Q4 2025 growth of 0.3% and full-year 2026 expansion of 1.3%, supported by low mortgage borrowing costs, near-full employment, and infrastructure and defense spending in Germany and France. Energy prices have moderated since the Ukraine-related spike in 2022. Uncertainty from U.S. President Donald Trump’s tariff threats was mitigated by capping the rate at 15%—up from 4.8%—thereby removing policy uncertainty and enabling firms to plan. The ECB may keep rates unchanged through mid-2027, with potential hikes contingent on inflationary pressures.