Mars Finance News, institutional surveys show that analysts surveyed expect the European Central Bank to cut interest rates twice more this year and no longer expect the bank's interest rate to be below 2%. Monthly surveys show that after six rate cuts so far, the ECB is still likely to cut interest rates in April and June. But unlike the previous round of surveys, respondents expect the deposit rate (currently 2.5%) to remain at 2% until the end of the survey period. In mid-February, a slight majority expected the final reduction in interest rates to 1.75% in March 2026. European governments plan to significantly increase defense investment, which could boost sluggish economic growth and exacerbate inflation. In addition to military spending, Germany also intends to increase spending by hundreds of billions of euros to transform its aging infrastructure. Marco Wagner, an economist at Commerzbank, said these expenditures "will add inflationary pressures by the end of 2026."
Analysts expect ECB to pause after two rate cuts this year
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