ECB cut interest rates by 25 basis points to 2.65%

The European Central Bank (ECB) cut interest rates by 25 basis points to 2.65%, the lowest since January 2023, amid softer inflation and weak growth. According to MIDF, this marks the sixth rate cut since June 2024 as the ECB anticipates slower growth of 0.9% in 2025 and 1.2% in 2026. Falling retail sales and easing inflation signal a sluggish economy, with inflation expected to approach the 2% target this year. MIDF expects more rate cuts if inflation remains under control, but warns any persistent price pressures could delay further easing.

ECB rates

The ECB’s sixth rate cut since June 2024 lowers interest rates to the lowest since January 2023, amid softer inflation and slower growth. It aligns with the ECB’s downgraded growth outlook of 0.9% in 2025 and 1.2% in 2026, driven by weaker exports, sluggish investment, and trade policy uncertainty, says MIDF.

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