The European Central Bank (ECB) announced on Thursday its decision to reduce its key interest rates by 25 basis points. The rates on the main refinancing operations, the marginal lending facility, and the deposit facility will thus go down to 4.25%, 4.50%, and 3.75%, respectively, effective June 12.
The Governing Council estimated that the information showing inflation is moving toward its target of 2% proved the cut as the right decision after nine months of maintaining the rates at the same level. It also noted the easing in underlying inflation.
Moreover, the ECB predicted inflation to average 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026. It also projected the Eurozone's economic growth to be at 0.9% in 2024, 1.4% in 2025, and 1.6% in 2026.