After Thursday’s decision, the ECB has held rates at 3.75%.
- This was in line with expectations following the June rate cut
- Inflation slowed to 2.5% in June
- Service inflation was above 4%
- Forecasts show inflation will fall to 2% by the end of 2025
- The ECB stated that it wants more evidence that inflation will drop to its 2% target
- Most predictions expect rate cuts in September
- Before the decision chances of a rate cut were placed at 73%
- After the announcement this chance dropped to 65%
- “What we do in September is wide open and will be determined on the basis of all the data that we will be receiving” - Chief Christine Lagarde
- Following the previous rate cut in June, macroeconomic tides have not shifted significantly