The European Central Bank still needs some time to change interest rates, despite declining inflation. At its most recent meeting, the ECB Council decided to leave the key interest rate at 4.50 percent.
“Future decisions by the ECB Governing Council will ensure that key interest rates are set at a sufficiently restrictive level for as long as necessary,” the euro watchdog said on Thursday.
After a series of ten rate hikes that started in the summer of 2022, the ECB has now kept rates constant for four meetings. Inflation in the eurozone has now fallen significantly and most recently stood at 2.6 percent in February, after 2.8 percent in January. That is not far from the target of 2.00 percent that the ECB considers the optimal level for the twenty members of the eurozone in the medium term.
Interest rate cut expected in June
Economists at the ECB expect this for 2025. According to forecasts, inflation will fall to 1.9 percent in 2026. The money market currently considers it very likely that there will be an interest rate cut in June. For the meeting in July, a discount has been almost fully incorporated into the prices.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
