ING's Base Case Sees The ECB Staying on Hold for The Next Two Years, But Events May Change That

08:38 AM EDT, 10/09/2025 (MT Newswires) -- The bar for yet another rate cut from the European Central Bank remains high, said ING.

In fact, the ECB currently feels very comfortable in what it calls a 'good place'.

With the ECB's own growth forecasts seeing the eurozone economy growing by slightly more than 1% each year and inflation nicely settling down at 2% over the next few years, there is indeed very little reason to change its monetary policy stance, wrote the bank in a note.

At the same time, however, there are still some valid dovish arguments that could force the central bank to cut further over the coming months, stated ING. Among them are the delayed adverse impact of United States tariffs, the stronger euro exchange rate, French politics or a delay in Germany's fiscal stimulus.

If any of these downside risks still materialize, the bank can see the ECB engaging in one or two more rate cuts. If not, and this is ING's base case scenario, interest rates will remain on hold for the next two years.

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