ECB cuts rates by 25 basis points as expected
The European Central Bank cut interest rates on Thursday by 25 basis points to 3.5%, as widely expected.
The Bank said in a statement: "Based on the Governing Council's updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to take another step in moderating the degree of monetary policy restriction."
It said recent inflation data have come in broadly as expected, and the latest staff projections confirm the previous inflation outlook. The ECB still expects inflation to average 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026, as in the June projections.
"Inflation is expected to rise again in the latter part of this year, partly because previous sharp falls in energy prices will drop out of the annual rates," it said.
"Inflation should then decline towards our target over the second half of next year."
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