Will the ECB Cut Interest Rates on Feb. 5?

Introduction to the European Central Bank’s Interest Rates

The European Central Bank (ECB) is expected to hold interest rates steady on February 5, marking the fifth consecutive meeting without a cut since the central bank lowered rates by 0.25 percentage points in June 2025. With interest rates already low at 2% and inflation hovering at or around the ECB’s targeted 2% level, the bank is in no rush to alter rates.

Key Takeaways

• The ECB is widely expected to hold interest rates steady on February 5 for a fifth consecutive meeting.
• A majority of forecasters expect steady rates over the remainder of 2026.
• Inflation in the eurozone is seen as under control, but downside risks have emerged amid the stronger euro.

What Are the Key ECB Interest Rates?

The first ECB rate cut came in June 2024, and a total of eight rate cuts have taken the deposit facility rate from 4.00% to the current level of 2.00%. Since June 11, 2025, the ECB’s three policy rates stand at:

• Deposit Facility Rate: 2.00%
• Main Refinancing Rate: 2.15%
• Marginal Lending Facility: 2.40%

Stronger Euro to Revive Rate Cut Debate in 2026

The stronger euro could revive the debate on a possible rate cut. Topics at the ECB meeting are likely to include trade policy uncertainty, the renewed appreciation of the euro, and the expected significant decline in the inflation rate in January to below the 2% mark. Inflation data for the eurozone are due on February 4, just a day before the ECB governing council meeting.

Will the ECB Cut Rates in March?

For now, the central bank will stay in a "good place," and the ECB president is not expected to say anything more on the exchange rate, beyond noting that the ECB will monitor it closely. However, if the latest trend continues and if the ECB wants to send a signal that a slight undershoot of inflation is as much a concern as a slight overshoot, the chances of a rate cut in March would clearly increase.

Is the Eurozone Economy Gaining Steam in 2026?

The eurozone has shown tentative signs of improvement toward the end of 2025, fresh GDP data show. Despite the tariff dispute with the US and growing competition from China, the eurozone has shown resilience. GDP grew by 0.3% quarter over quarter in the fourth quarter of 2025, exceeding the Bloomberg consensus forecast of 0.2%.

When Are the ECB Meetings in 2026?

The ECB meetings in 2026 are scheduled for:

• February 5, 2026
• March 19, 2026
• April 30, 2026
• June 11, 2026
• July 23, 2026
• September 10, 2026
• October 29, 2026
• December 17, 2026

Conclusion

In conclusion, the European Central Bank is expected to hold interest rates steady on February 5, and a majority of forecasters expect steady rates over the remainder of 2026. The stronger euro could revive the debate on a possible rate cut, but for now, the central bank will stay in a "good place." The eurozone economy has shown tentative signs of improvement, and the ECB meetings in 2026 will be closely watched for any changes in interest rates or monetary policy.