The European Central Bank is widely expected to maintain interest rates at current levels until at least the end of 2026, according to a new Reuters survey of economists. The outlook reflects a steady economic environment across the euro zone, with inflation close to target, growth stable and unemployment at record lows despite uncertainty in the global economy.
The case for an extended pause has strengthened since the ECB last reduced rates in June. Inflation has remained close to the bank’s 2 percent objective, and the labour market has continued to perform strongly. In contrast, some other major economies, including the United States, have faced additional pressures stemming from significant tariffs on imported goods.
The ECB held rates again in October for the third consecutive meeting. Several members of the Governing Council signalled that the central bank was likely to maintain its current stance for some time. President Christine Lagarde described the current position as being “in a good place” while cautioning that the situation could still change.
Almost all respondents in the latest poll expect the deposit rate to remain at 2 percent at the next ECB meeting. A large majority believe rates will remain unchanged through the middle of next year, and around two thirds expect no rate adjustments throughout 2026. Only a small number of economists foresee cuts before the end of that period.
Alain Durre, head of Europe macro research at Natixis, noted that economic conditions are broadly favourable, but warned that the balance remains delicate. He said that while the next move is more likely to be a cut than a hike, both growth and inflation still face downward risks.
Most economists surveyed anticipate slower growth over the coming year rather than an acceleration. Median forecasts suggest that the euro zone economy will grow by 1.4 percent in 2025, slow to 1.1 percent next year and return to 1.4 percent in 2027. These projections are closely aligned with the European Commission’s recent outlook.
Inflation, currently at 2.1 percent, is expected to average 2 percent this quarter before easing to 1.7 percent early next year. Many analysts believe inflation will remain below the ECB’s target throughout 2026, driven in part by energy costs and the strength of the euro.
Bill Diviney, head of macro research at ABN AMRO, said that while lower inflation may prompt discussions about rate cuts in the near term, the picture could shift again as 2027 approaches.
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