European Central Bank cuts interest rates for the first time since 2019: Live updates
The European Central Bank on Thursday confirmed a widely-anticipated reduction in interest rates at its meeting, despite lingering inflationary pressures in the 20-nation euro zone.
"Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady," the ECB Governing Council said in a statement.
In updated macroeconomic projections that will be closely analyzed by investors, ECB staff raised their annual average headline inflation outlook for 2024 to 2.5% from 2.3% previously.
Money markets had fully priced in the 25 basis point move lower at the June gathering. It is the first cut since September 2019, when the deposit facility was in negative territory.
Markets have only fully priced one further reduction this year, but economists polled by Reuters last week forecast two more cuts taking place over the period.
