MFS: ECB to hold rates stable, risks appear balanced

MFS: ECB to hold rates stable, risks appear balanced

February 6, 2026

Interest Rates ECB

Annalisa Piazza, Fixed Income Portfolio Manager at MFS, responds to yesterday's ECB meeting:

'The ECB left rates unchanged at 2% at today’s meeting, maintaining its data-dependent and meeting-by-meeting guidance, in line with market expectations.

Risks to the growth outlook appear balanced, with several factors supporting the economy despite ongoing trade policy uncertainty and geopolitical tensions. Inflation surprised to the downside in January, particularly at the core level, but the ECB is inclined to wait longer before reassessing underlying inflationary pressures, including the impact of a stronger euro. While the move in the EUR was discussed, it is not currently a cause for concern.

We continue to expect the ECB to keep rates stable at 2% following today’s meeting. The ECB will monitor developments in core prices, particularly in services and wages, in the early part of the year before deciding on further action. Wage trends and the response of domestic demand to external shocks will be key factors.'

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