European Central Bank keeps interest rates unchanged amid resilient growth

WAM
06 Feb 2026, 01:12 GMT+10

BRUSSELS, 5th February, 2026 (WAM) -- The European Central Bank (ECB) kept interest rates unchanged on Thursday, as the eurozone economy continued to record modest but resilient growth despite global challenges, including the impact of US tariffs.

The ECB maintained its deposit rate at 2%, where it has stood since June, following a series of cuts from a peak of 4% in mid-2024.

ECB President Christine Lagarde said the economy remains resilient in a challenging global environment, supported by low unemployment, increased government spending on defence and infrastructure, and the impact of earlier rate cuts, while noting that external conditions remain difficult due to higher tariffs and a strong euro.

Lower interest rates have helped revive mortgage lending and financing for new construction projects by reducing borrowing costs, supporting economic activity, while falling unemployment has boosted consumer demand, limiting the need for further rate cuts.

The eurozone economy grew by 0.3% in the final quarter of 2025, exceeding expectations, with growth forecast at 1.3% this year, according to various estimates. Inflation fell below the ECB's 2% target to 1.7% in January.

Analysts expect the ECB to keep rates on hold until accelerating growth prompts a return to rate increases around mid-2027.

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