ING Says ECB Points to Uncertainty in Its Unchanged Rate Decision

08:58 AM EST, 02/05/2026 (MT Newswires) -- The European Central Bank decided to keep rates on hold on Thursday, said ING.

The official policy announcement also illustrates that the ECB still sits comfortably in its 'good place', wrote the bank in a note.

As the last ECB rate cut dates back to June last year, it's fair to say that the hurdle to cut again is very high, stated ING. However, looking at the history of the central bank's rate-cutting cycles, a longer period of inactivity after a series of rate cuts doesn't automatically mean that the ECB is done.

In 2012 and 2024, the bank saw two occasions where it restarted a cutting cycle that initially looked concluded.

Looking ahead, if the ECB were to leave its good place, any first move would be a cut, not a hike -- at least in the near term, added ING. Whether it is general market unease or, more specifically, the strengthening of the euro (EUR), there is still a risk of inflation undershooting over the coming months.

As long as the cyclical recovery of the eurozone continues, any inflation undershooting shouldn't be mistaken for deflationary risks, but could still encourage more dovish ECB members to push for an insurance rate cut, pointed out ING.

The bank will wait to see what ECB President Christine Lagarde has to say on the euro and the ECB's symmetric inflation target at the press conference, starting at 2:45 p.m. CET.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.