ECB Cuts Cycle Coming to an End: Evening Briefing Europe

The European Central Bank cut rates by a quarter-point to 2% today – the eighth cut in a year – in line with forecasts from analysts surveyed by Bloomberg. On announcing the cut, ECB President Christine Lagarde said that the bank is coming to the end of its reductions cycle, with inflation currently below its 2% target for the first time in eight months and only the second since 2021.

“We are getting to the end of a monetary-policy cycle that was responding to compounded shocks — including Covid, the illegitimate war in Ukraine and the energy crisis,” Lagarde told reporters in Frankfurt. One unknown remains: US President Donald Trump’s trade policy going forward, which still risks inflation shocks. Talks between the US and the European Union over tariffs are due to finish next week.