Finance
ECB to extend its longest interest rate pause since below zero days
Published by Global Banking & Finance Review®
Posted on February 12, 2026
3 min readLast updated: February 12, 2026
Quick Summary
The ECB will keep its interest rate at 2.00% through 2027, maintaining economic stability despite geopolitical risks and inflation concerns.
ECB to extend its longest interest rate pause since below zero days
ECB's Interest Rate Strategy
By Indradip Ghosh
Current Economic Conditions
BENGALURU, Feb 12 (Reuters) - The European Central Bank will keep its deposit rate at 2.00% at least through the end of this year, a Reuters poll showed, extending its longest spell of steady borrowing costs since the negative-rate era despite heightened geopolitical risks.
Inflation Trends
Inflation fell to a 16-month low of 1.7% in January, prompting some policymakers to warn price growth could slow too much and that the ECB must be ready to act. Even so, the economy has remained resilient.
Future Projections
Economists in the February 9-12 poll broadly kept their long-held expectations of steady rates, near-target inflation and stable growth.
The ECB, which left rates unchanged for a fifth straight meeting last week, is expected to stay on hold until at least 2027, according to 66 of 74 forecasters, an outlook unchanged since October.
If realised, that would mark the longest run of unchanged rates since the pandemic, when the near-decade stretch of negative rates was in its final stages. Record inflation later forced the ECB to lift rates quickly.
"The ECB is now in a sort of textbook perfect situation for a central bank .... It's also very clear over the next six months, the ECB is either staying at 2% or cutting," said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics.
The euro zone economy, which expanded 0.3% in the final quarter of 2025, is expected to grow at a similar pace through 2026, with a slight pickup later in the year.
It is forecast to grow 1.2% this year and 1.4% in 2027 after last year's 1.5% rise, an outlook steady since August and partly supported by optimism around infrastructure spending.
Inflation, which the ECB targets at 2%, is expected to average 1.7% this quarter, rise to 1.9% next quarter, and hover around that level through 2026, the survey showed. It is forecast to average 1.8% this year and 2.0% next, views broadly unchanged since March last year.
"Our baseline assumes the domestic resilience will dominate the external vulnerabilities and the ECB will be able to stay on hold. But it's fair to say that uncertainty around the path of monetary policy is high," Deutsche Bank economists said.
Some say a stronger euro could add disinflationary pressure. But in trade-weighted terms, which the ECB watches more carefully, the currency is not flashing warning signs.
After falling around 1.6% from its recent peak above $1.20, the euro is expected to regain those losses over the coming year, a separate Reuters poll found.
(Other stories from the Reuters global economic poll)
(Reporting by Indradip Ghosh; Polling by Anant Chandak and Debrah Gomes; Analysis by Renusri K; Editing by Ross Finley and Mark Potter)
Key Takeaways
- •ECB maintains interest rate at 2.00% through 2027.
- •Inflation fell to a 16-month low of 1.7% in January.
- •Eurozone economy expected to grow steadily through 2027.
- •Geopolitical risks do not currently affect ECB's strategy.
- •Euro currency expected to regain recent losses.
Frequently Asked Questions about ECB to extend its longest interest rate pause since below zero days
1What is monetary policy?
Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing the currency.
2What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
3What is a central bank?
A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It also oversees the banking system and implements monetary policy.
4What are interest rates?
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage. They are influenced by central bank policies and economic conditions.
5What is economic growth?
Economic growth is an increase in the production of goods and services in an economy over a period, often measured by the rise in Gross Domestic Product (GDP).
