President Lagarde Presents the Latest Monetary Policy Decisions – 5 February 2026

Why It Matters

Holding rates steady supports the fragile euro‑area recovery while signaling the ECB’s readiness to act if inflation resurges, influencing investor expectations and sovereign borrowing costs.

Key Takeaways

• ECB leaves all three policy rates unchanged amid stable inflation outlook
• Eurozone Q4 2025 growth at 0.3%, driven by services sector
• Inflation fell to 1.7% in January, below the 2% target
• Bulgaria joins euro area, adding new voting member to Governing Council
• ECB warns of geopolitical, trade risks that could swing inflation higher

Summary

President Christine Lagarde’s February 5 press conference confirmed that the European Central Bank kept its three key policy rates on hold, emphasizing a data‑dependent stance as inflation eases toward the 2% medium‑term target. The meeting also marked Bulgaria’s accession to the euro area, granting its central bank governor voting rights on the Governing Council.

The ECB highlighted a modest 0.3% euro‑area growth in Q4 2025, led by services, especially information and communication, while manufacturing remained resilient despite global trade headwinds. Unemployment slipped to 6.2% and household consumption is expected to benefit from rising labor incomes and lower savings rates. Public spending on defence and infrastructure, together with firms’ digital investment plans, are projected to bolster domestic demand.

Lagarde stressed that the bank will not pre‑commit to any rate path, reiterating a “data‑dependent and meeting‑by‑meeting” approach. She called for deeper single‑market integration, accelerated completion of the savings‑and‑investments and banking unions, and rapid adoption of the digital euro to strengthen monetary‑policy transmission.

The decision to pause rate cuts signals confidence that price stability is returning, yet the ECB warned that geopolitical tensions, trade policy uncertainty and a stronger euro could reignite inflationary pressures. Markets will watch upcoming data closely, as any shift in inflation dynamics could prompt a policy pivot, affecting borrowing costs across the euro area.

Original Description

Today our Governing Council decided on monetary policy.

Listen to President Christine Lagarde present today’s decisions. The statement also covers:

• how the economy is performing

• how we expect prices to develop

• the risks to the economic outlook

• the dynamics behind financial and monetary conditions

Published and recorded during our press conference on 5 February 2026.

Our monetary policy statement at a glance, 5 February 2026

www.ecb.europa.eu/press/press_conf…february.en.html

Christine Lagarde, Luis de Guindos: Monetary policy statement, 5 February 2026

www.ecb.europa.eu/press/press_conf…858cb986.en.html

Monetary policy decisions, 5 February 2026

www.ecb.europa.eu/press/pr/date/20…1d26959b.en.html

Combined monetary policy decisions and statement, 5 February 2026

www.ecb.europa.eu/press/press_conf…c74e825a7.en.pdf

European Central Bank

www.ecb.europa.eu/home/html/index.en.html