The ECB is preparing to lower the rate below 2% by 2026

According to most analysts, the ECB plans to lower its key deposit rate below 2% by early 2026. Previously, experts expected that the regulator would limit itself to three rate cuts of 25 basis points in 2025, bringing it from the current 2.75% to 2%.

The ECB leadership expresses confidence that inflation will soon reach the target level of 2% in the eurozone, but the continuing uncertainty due to the US intentions to impose duties on imports of goods complicates the situation. Additional risks are created by political instability in France and Germany, which is of concern to businesses and the public.

According to experts, the ECB has the opportunity to cut rates without fear of accelerating inflation. Trade conflicts with the United States are likely to hit the EU harder than the UK, which may require the regulator to lower the rate to a level below neutral. The ECB has already cut rates five times since June 2024. The next meeting will be held on March 6.