BlackRock: ECB stuck in the middle at 2

BlackRock: ECB stuck in the middle at 2

February 6, 2026

Interest Rates ECB

Roelof Salomons, Chief Investment Strategist Netherlands & Nordics at the BlackRock Investment Institute, comments on the ECB decision to keep interest rates unchanged:

'We think current economic conditions support the ECB’s decision to keep policy rates at 2%. Growth is 'just right' for the ECB, neither rocketing higher nor stalling. On the other hand, inflation is dipping and might undershoot 2% with a stronger euro. With that combination, we see policy rates stuck at 2% through 2026.

That makes sense to us given upwards pressure on inflation from persistent supply constraints and slightly looser fiscal policy, including Germany’s ramp up in government spending. Companies have also started spending on AI, another potential boost to growth. The consensus view is quite narrow – banking on slightly better growth and gradually slowing inflation – so investors should stay alert to surprises.

We’re neutral on European stocks and bonds, preferring Europe’s credit over U.S. peers. Opportunities abound in Europe’s financials, infrastructure and pharmaceuticals in our view, supported by cheap valuations, Europe’s pro-growth shift and AI adoption.'

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