The European Central Bank reduced the deposit facility rate, its policy interest rate anchor, by a quarter of a percentage point to 3.5%, as the central bank slightly lowered its economic growth forecast.
The GDP growth rates projected by ECB staff are now 0.8% in 2024, 1.3% in 2025 and 1.5% in 2026, with all three down 0.1 percentage point from the June forecast. Staff projection for core inflation in the eurozone are now 2.9% this year and 2.3% in 2025, both 0.1 percentage points higher than its previous estimates, as well as 2% in 2026 which was held unchanged.
The decision to cut interest rate by 25 basis points was unanimous among members of ECB Governing Council, said Christine Lagarde, president of the central bank, during the post-meeting press conference.
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