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ECB To Maintain Interest Rates As Economy Exhibits Resilience

Steady Policy Amid Subdued Inflation

The European Central Bank (ECB) is expected to keep interest rates unchanged during its December 18 meeting and maintain this stance through next year. This decision comes as inflation remains near the bank’s 2% target and economic growth shows unexpected strength.

Data-Driven Decisions

Recent reports indicate that Euro zone inflation edged up to 2.2% in November from 2.1% in October, yet has largely stayed anchored around the ECB’s target this year. Economic performance has averaged a growth rate of nearly 1.5% over the past two quarters, giving policymakers little reason to alter current rates following a previous cut of two percentage points.

Consensus Among Experts

All 96 economists surveyed by Reuters from December 5-10 agree that the deposit rate will hold at 2% at the upcoming meeting. A robust majority – approximately 80% – expect that rates will remain steady through mid-2026, a view that has grown more pronounced compared to previous surveys.

Insights From Market Strategists

Bas van Geffen, Senior Macro Strategist at Rabobank (Rabobank), remarked, “The economy has been more resilient than we had anticipated. With inflation at target levels, there is currently no pressing need to adjust interest rates.” Similarly, ECB President Christine Lagarde has noted that the economy’s robust performance amidst global uncertainty may lead to upward revisions of growth projections, though monetary policy remains in a favorable position.

Looking Ahead

Market sentiment is reflected in interest rate futures, which now almost entirely discount further easing until mid-2026. Median forecasts suggest that inflation will dip to 2.1% this quarter and fall further to 1.7% in early 2026, remaining below the ECB’s target. While some analysts anticipate the possibility of rate cuts in response to any significant negative shocks, the prevailing view points towards stability with a reduced likelihood of hikes.

Risks and Projections

Fabio Balboni, Senior European Economist at HSBC (HSBC), highlighted that downside risks remain, noting that labor market trends and subdued stimulus effects in Germany could impact growth. With expectations for economic growth at 1.4% this year and 1.1% in 2026, the potential for rate cuts in 2026 has been acknowledged should the economic landscape change significantly.

Robust Meat Market Dynamics Ensure A Fully Stocked Easter Feast

Meat supply increased ahead of Easter 2026, with prices remaining broadly stable despite higher seasonal demand, according to data from slaughterhouses and the Consumer Protection Service Price Observatory.  Market data show higher volumes of lamb and pork alongside limited price increases across key categories.

Strong Supply And Price Stability

Recent data indicate increased meat supply compared to the same period last year, supporting availability during peak demand. Higher volumes helped limit price increases across most product categories. Stable supply conditions contributed to controlled pricing despite seasonal pressure on demand.

Enhanced Competition With Greek Lamb Imports

Market supply was supported by the import of 4,000 lambs from Greece, increasing availability and competition. Additional supply contributed to price stability across lamb products. Domestic production adjusted as imports increased, with 2,105 fewer lambs processed locally on Great Tuesday compared to the previous year.

Dynamic Production Trends In Meat Processing

A total of 19,883 lambs were slaughtered over the past six days, marking a 6% increase compared to the same period last year. Pork production also increased, with 10,655 pigs processed versus 9,452 a year earlier, representing a 13% rise. Higher output across categories reflects increased supply ahead of the holiday period.

Price Adjustments In Key Meat Categories

The average price for locally sourced lamb reached €14.10 per kg, up 4.76% compared to last year. Pork prices declined, with tenderloin averaging €5.97 per kg (-4.47%) and neck cut €6.16 per kg (-1.62%). Poultry remained stable at €4.16 per kg, recording a marginal decrease of 0.05%, maintaining its position as the lowest-cost option.

Overall Cost Implications For The Festive Table

An indicative Easter table for eight people is estimated at €186.42 in 2026 for 19 basic products, compared to €179.36 in 2025, reflecting a 3.9% increase. Meat prices had a limited impact on the increase. Higher costs were driven by vegetables, with tomatoes rising by 81.73% and cucumbers by 42.24%. Prices for fresh potatoes and olive oil declined by 12% to 19%, partially offsetting overall costs.

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