ECB Cuts by 25PB; Growth Revised Down and Inflation Expected at 2.1% in 2027

12 December 2024

By Marta Vilar – FRANKFURT (Econostream) – The European Central Bank’s Governing Council on Thursday decided to cut its key interest rates by 25bp, as widely expected by markets and analysts.

With the cut, the three ECB interest rates, effective from September 18, are at 3% for the deposit facility, 3.15% for the main refinancing operations and 3.40% for the marginal lending facility.

‘Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter’, the ECB said in a press release.

‘The disinflation process is well on track’, according to the ECB.

The ECB now projects HICP of 2.4% in 2024, 2.1% in 2025,1.9% in 2026 and 2.1% in 2027, with the measure ex-energy and food at 2.9% in 2024, 2.3% in 2025,1.9% in 2026 and 1.9% in 2027. Economic growth is revised downwards to at 0.7% in 2024, 1.1% in 2025,1.4% in 2026 and 1.3% in 2027, according to the updated forecasts.