The European Central Bank (ECB) has lowered interest rates again on Thursday, as widely expected.
The inflation rate in the eurozone dropped below 2% last month, which is the ECB’s main target. The ECB reduced the deposit rate from 2.25% to 2%. This rate is what banks receive when they store excess funds with the central bank. By adjusting this rate, the ECB aims to steer monetary policy. Lowering interest rates generally makes borrowing cheaper and saving less appealing, potentially boosting the economy amid looming trade tensions with the United States.
This marks the eighth rate cut by the ECB since mid-last year. Analysts at Bloomberg predict another rate reduction in September, depending on the impact of U.S. import tariffs. President Donald Trump has threatened to impose a 50% tariff on European goods starting 9 July, though negotiations with the EU are said to be “going in the right direction.”
ECB President Christine Lagarde is scheduled to provide further details on the interest rate decision later on Thursday.
