The European Central Bank cut its interest rates today, bringing its key deposit rate down by 25 basis points to 2.0%. The ECB said its decision to lower borrowing costs for the eighth time since last June is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The central bank noted that inflation is currently at around the Governing Council's 2% medium-term target. In the baseline of the new Eurosystem staff projections, headline inflation is set to average 2% in 2025, 1.6% in 2026 and 2% in 2027. The downward revisions compared with the March projections, by 0.3 percentage points for both 2025 and 2026, mainly reflect lower assumptions for energy prices and a stronger euro.

Powered by Commodity Insights