Published by Global Banking & Finance Review®
Posted on January 16, 2025
2 min readLast updated: January 27, 2026
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The ECB plans cautious rate cuts amid inflation slowdown, with further easing likely. The focus shifts to economic growth, with a meeting on Jan 30.
FRANKFURT (Reuters) - The European Central Bank needed to cut interest rates cautiously and gradually but further policy easing was likely coming, policymakers concluded last month, according to the accounts of their Dec 11-12 meeting published on Thursday.
The ECB cut interest rates for the third time in a row last month and said that further easing was coming given a slowdown in inflaiton, even if the timing and pace of rate cuts was still up for discussion.
"This cautious approach was still warranted in view of the prevailing uncertainties," the ECB said in the accounts. "Nevertheless, if the baseline projection for inflation was confirmed over the next few months and quarters, a gradual dialling-back of policy restrictiveness was seen as appropriate."
With the economy barely growing now, the ECB's focus has shifted away from excessive price growth to anaemic activity, and a growing number of policymakers now argue for rates to fall at least to a level that stops holding back economic growth.
The bank will next meet on Jan 30 and investors have fully priced another 25 basis point cut in its 3.00% deposit rate.
The benchmark is then seen dropping further later in the year to end 2025 at 2%, around the bottom end of the estimate range for the neutral rate, which neither slows nor stimulates growth.
(Reporting by Balazs Koranyi, Editing by William Maclean)
The main topic is the European Central Bank's plan for further interest rate cuts amid an economic slowdown.
The ECB is cutting rates to address a slowdown in inflation and to support economic growth.
The next ECB meeting is scheduled for January 30.
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