Photograph: DANIEL ROLAND/AFP via Getty ImagesDeutsche Bank’s base case is that the European Central Bank (ECB) will keep interest rates on hold for the whole of 2026 before delivering a hike midway through 2027. In a research note, published on Wednesday – the day before the ECB’s latest rates decision, it acknowledged, however, there was still the faint possibility of a further rate cut this year. In the note, the bank considers three “negative macro surprises” that could shift the ECB off its current holding pattern. “If the dollar weakens and euro strengthens, the ECB’s capacity to tolerate FX-based disinflation could be reached.”Another factor that might prompt a rate cut is a “downside growth surprise”. “A scenario that reduces GDP growth by 0.5 per cent spread over two years is the minimum required to think a rate cut is becoming a real risk,” it says.

Source: The Irish Times February 05, 2026 07:31 UTC