The latest statements from the two major central banks!
### Recent remarks from the world's two leading monetary authorities have sparked widespread attention.
The People's Bank of China and the Federal Reserve have both issued new guidance on their monetary policies, signaling potential shifts in their approaches to economic stabilization.
**Chinese Central Bank**: "We will continue to implement prudent monetary policies and maintain financial stability."
**U.S. Federal Reserve**: "Our focus remains on achieving maximum employment and stable inflation."
These statements suggest that both institutions are closely monitoring economic indicators and are prepared to adjust their strategies as needed to support growth and control inflation.
Analysts believe that these signals could influence global markets and investor confidence in the coming months.

【Introduction】European Central Bank and Bank of England keep interest rates unchanged, in line with market expectations

On February 5th (Thursday), local time, the Bank of England and the European Central Bank announced as scheduled that they would maintain interest rates.

European Central Bank: Ensuring medium-term inflation remains stable at the 2% target level

The latest decision shows that the European Central Bank announced to keep the three main interest rates unchanged, maintaining the deposit facility rate at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%, in line with market expectations.

Following this decision, the euro strengthened against the US dollar in the short term.

Since January, the euro has continued to strengthen. This appreciation was also driven by a weakening dollar. An analyst told China Fund News that the euro’s appreciation affects the European Central Bank’s efforts to stabilize prices, which will suppress export growth and also lower import costs.

Before this decision was announced, some ECB officials engaged in “verbal intervention” regarding the euro. For example, François Villeroy de Galhau, Governor of the Bank of France, stated that there is no exchange rate target, but the impact of euro appreciation will be assessed when formulating policies.

Some also believe that a stronger euro will not directly affect the monetary policy path. For example, Roberto Cobo García, Head of Foreign Exchange Strategy at Banco Santander in Madrid, said that as long as disorderly and sharp fluctuations are avoided, a more robust euro will not trigger a clear dovish policy response like in early 2025. The magnitude and speed of exchange rate fluctuations are also important factors influencing the central bank’s assessment.

When announcing the monetary policy decision, the European Central Bank stated its determination to ensure that medium-term inflation remains at the 2% target level.

Eastern Wealth Management said that the risk of European inflation being lower than expected at the beginning of the year might lead the ECB to cut interest rates again to 1.75% later this year.

Bank of England: Further room for interest rate cuts

On February 5th, local time, the Bank of England announced that the benchmark interest rate would remain at 3.75%, in line with market expectations. The statement indicated that if wage growth slows down and helps curb inflation, there could be further rate cuts in the future.

The Monetary Policy Committee approved this rate decision with a vote of 5:4, with five members supporting holding rates steady and four supporting a 25 basis point cut.

Since August 2024, the Bank of England has cut interest rates by a total of 150 basis points. The last rate cut was in December last year, easing policy tightening.

The Bank of England stated that, based on current conditions, further rate reductions are possible. The extent and timing of further monetary easing will depend on the evolution of inflation prospects. The current monetary policy goal is to ensure inflation not only falls back to 2% but also remains stably at that level in the medium term, which requires balancing various risks during the process of achieving this target.

Anna Anthony, Managing Partner of Ernst & Young UK, pointed out that by mid-2026, the UK will achieve its medium-term inflation target of 2%, and the Bank of England might only cut rates once in April this year.

Before the decision was announced, institutions expected that, given the current macroeconomic situation, there was little chance of a rate cut in February.

On macroeconomic data, S&P data shows that in January 2026, the UK Manufacturing Purchasing Managers’ Index (PMI) rebounded sharply from December’s 50.6 to 51.8, the best level since August 2024.

According to the UK Office for National Statistics, in December 2025, the UK Consumer Price Index (CPI) rebounded from 3.2% in November to 3.4%, and the Services Price Index rose from 4.4% in November to 4.5%.

Data from the UK Retail Consortium shows that in January, both food and non-food prices increased. Food prices rose by 3.9% year-on-year, with fresh food prices increasing to 4.4%, and non-food prices turned upward for the first time after months of decline. UK consumers’ expectations for the macroeconomy and personal finances over the next three months have also improved significantly.

Additionally, the UK Treasury did not impose significant tax hikes again at the end of 2025 as market expectations suggested. Data from the UK Think Tank shows that in January, the confidence index among UK entrepreneurs rose sharply from -4 in December to 14.

Some analysts told China Fund News that the pace of UK inflation decline is still insufficient to support monetary policy easing, and concerns remain about household consumption and the employment market.

Following this decision, the GBP/USD exchange rate fell in the short term.

(Source: China Fund News)