In a move that marks the first shift in over two years, the European Central Bank has trimmed its key interest rates, lowering the deposit rate by 25 basis points to 2%, with changes taking effect from 11 June.
The main refinancing and marginal lending rates follow suit, now set at 2.15% and 2.40% respectively.
This long-anticipated adjustment comes amid signs that inflation in the eurozone is coming under control.
The ECB’s latest projections hold steady: inflation is expected at 2.4% in 2025, dipping to 1.9% in 2026 and 2027.
Yet, economic growth remains modest, forecast at just 0.9% for 2025, inching up to 1.1% and 1.3% in the years following.
Staying true to its data-driven mantra, the ECB maintains a meeting-by-meeting approach, resisting any firm commitment to a future path.
For now, this rate cut offers a cautious nod toward easing, as Europe’s economy tiptoes toward recovery.