📉 8th cut in ECB key rates!
The Governing Council of the European Central Bank (ECB) announced on June 5, 2025, a new 25-basis-point cut to its three key interest rates. This decision is part of a continued shift toward a more accommodative monetary policy, as inflation is now approaching the 2% medium-term target.
🎯 Inflation under control, but uncertain
The latest projections from the Eurosystem confirm a headline inflation average of 2.0% in 2025, 1.6% in 2026, and 2.0% in 2027. These figures are slightly revised downward compared to the March forecasts, mainly due to lower energy prices and a stronger euro.
Underlying inflation (excluding energy and food) is expected to remain stable: 2.4% in 2025, then 1.9% in 2026 and 2027. This indicates a gradual stabilization, despite a still high pace of wage growth, which is now moderating.
đź“Š Weak growth but supported by investments
Real GDP growth is estimated at 0.9% in 2025, 1.1% in 2026, and 1.3% in 2027. While trade tensions are weighing on exports and private investment, public spending on defense and infrastructure is expected to support activity. In addition, rising real incomes and a robust labor market are strengthening the resilience of household consumption.
Alternative scenarios will be published on the ECB website to assess the impact of an escalation or, on the contrary, an easing of trade tensions.
📉 Lower rates from June 11
The new key rates, effective from June 11, 2025, will be as follows:
- Deposit facility rate: 2.00%.
- Rate on main refinancing operations: 2.15%.
- Marginal lending rate: 2.40%.
🛡️ A flexible, adaptive strategy
The Governing Council remains committed to bringing inflation sustainably back to its 2% objective. In a context of exceptional uncertainty, it will maintain a case-by-case approach, adjusting rates in line with developments in economic and financial data. No commitment is made on a specific rate path.
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