ECB Holds Rates
Citing Economic Resilience and Global Uncertainty
On February 5, 2026, the Governing Council of the European Central Bank (ECB) announced its decision to leave the three key ECB interest rates unchanged. This decision reflects an updated assessment reconfirming that inflation is on track to stabilise at the 2% target in the medium term.
Economic Outlook and Risks
The ECB describes the current economy as “resilient” despite operating within a challenging global environment. Several domestic factors are currently underpinning growth:
Low unemployment
Solid private sector balance sheets
The supportive effects of past interest rate cuts
The gradual rollout of public spending dedicated to defence and infrastructure
However, the Governing Council notes that the economic outlook remains uncertain. The primary risks identified are ongoing global trade policy uncertainty and geopolitical tensions.
Key Interest Rates
The specific rates remain fixed at the following levels:
Deposit facility: 2.00%
Main refinancing operations: 2.15%
Marginal lending facility: 2.40%
Future Policy Strategy
The Governing Council explicitly stated it is not pre-committing to a particular rate path. Instead, it will adhere to a data-dependent and meeting-by-meeting approach to determine the appropriate monetary stance. Future decisions will rely on assessments of the inflation outlook, incoming economic and financial data, underlying inflation dynamics, and the strength of monetary policy transmission. The ultimate goal remains ensuring inflation stabilises at the 2% medium-term target.
Asset Purchases and Instruments
The portfolios for both the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) are declining at a “measured and predictable pace.” This reduction is occurring because the Eurosystem no longer reinvests the principal payments from maturing securities.
Additionally, the ECB emphasized that the Transmission Protection Instrument (TPI) is available. This tool is designed to counter “unwarranted, disorderly market dynamics” that might threaten monetary policy transmission across euro area countries, thereby ensuring the Council can deliver on its price stability mandate.