Analysts expect the European Central Bank to pause after cutting interest rates twice this year

ChainCatcher news, institutional surveys show that interviewed analysts expect the European Central Bank to cut interest rates two more times this year, and no longer anticipate that the bank's rates will fall below 2%.

The monthly survey indicates that after six rate cuts so far, the European Central Bank is still likely to cut rates consecutively in April and June. However, unlike the previous survey, respondents expect the deposit rate (currently at 2.5%) to remain at 2% before the end of the survey period. In mid-February, a slight majority had anticipated that rates would eventually drop to 1.75% by March 2026. Governments across Europe plan to significantly increase defense investments, which could boost sluggish economic growth and exacerbate inflation.

In addition to military spending, Germany also intends to increase spending by several hundred billion euros to renovate its aging infrastructure. Deutsche Bank economist Marco Wagner stated that this spending "will increase inflationary pressure by the end of 2026."