ECB CUT INTEREST IN 25 POINTS BASE

The European Central Bank (ECB) has decided today to lower interest rates by 25 base points, as it was already anticipated by markets, the seventh reduction since it started this cycle of cuts in June 2024. The rate is now 2.25%.

In a statement, the ECB states that the decision is made at a time when, although the euro economy has « reinforcing its resilience to world shocks, » « growth prospects have deteriorated due to growing commercial tensions. »

« It is likely that added uncertainty reduces the confidence of families and companies and that the adverse and volatile reaction of the market to commercial tensions leads to an increase in the restriction of financing conditions, » warns the institution.

These factors “can further affect economic perspectives for the euro area,” he adds.

The bank led by Christine Lagarde then decided to advance with another interest cut, taking into account the assessment that makes “inflation perspectives, underlying inflation dynamics and the strength of monetary policy transmission”, signaling that “the misinflating process is well forwarded”.

Interest rates applicable to the permanent ease of deposit, main refinancing operations and permanent ease of liquidity assignment will be reduced to, respectively, 2.25%, 2.40%and 2.65%.

The ECB council ensures, in the statement, that it is « determined to ensure that inflation sustained, in a sustained manner, in its average term of 2%. »