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ECB Monetary policy decisions
The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. Inflation is currently at around the Governing Council’s 2% medium-term target. In the baseline of the new Eurosystem staff projections, headline inflation is set to average 2.0% in 2025, 1.6% in 2026 and 2.0% in 2027. The ... (full story)
- ECB SAYS STAFF SEE REAL GDP GROWTH AVERAGING 0.9% IN 2025, 1.1% IN 2026 AND 1.3% IN 2027
ECB SAYS WHILE UNCERTAINTY SURROUNDING TRADE POLICIES IS EXPECTED TO WEIGH ON BUSINESS INVESTMENT AND EXPORTS, ESPECIALLY IN SHORT TERM, RISING GOVERNMENT INVESTMENT IN DEFENCE AND INFRASTRUCTURE WILL INCREASINGLY SUPPORT GROWTH OVER MEDIUM TERM
ECB SAYS IN CONTEXT OF HIGH UNCERTAINTY, STAFF ALSO ASSESSED SOME OF MECHANISMS BY WHICH DIFFERENT TRADE POLICIES COULD AFFECT GROWTH AND INFLATION UNDER SOME ALTERNATIVE ILLUSTRATIVE SCENARIOS
ECB SAYS THESE SCENARIOS WILL BE PUBLISHED WITH STAFF PROJECTIONS ON ECB’S WEBSITE
ECB SAYS UNDER THIS SCENARIO ANALYSIS, A FURTHER ESCALATION OF TRADE TENSIONS OVER COMING MONTHS WOULD RESULT IN GROWTH AND INFLATION BEING BELOW BASELINE PROJECTIONS
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ECB cuts rates for eighth time amid trade war risk
The European Central Bank cut interest rates for the eighth time in a year on Thursday, acknowledging inflation was under control and turning more pessimistic about the euro zone's economic prospects amid risks of a trade war with the United States. Thursday's cut lowers the rate that the ECB pays on bank deposits from 2.25% to 2.0%, the middle of the range that the central bank sees as "neutral" - neither curbing nor boosting the economy. The ECB kept all options open for its subsequent meetings, although some policymakers and many investors expect a pause in rate cuts at its next meeting in July. ... (full story)
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