Overview

• The ECB lowered its deposit rate to 2%, its main refinancing rate to 2.15% and its marginal lending rate to 2.40% after cutting rates eight times since June 2024.
• Inflation forecasts were revised down to 2.0% for 2025, 1.6% for 2026 and 2.0% for 2027 amid expectations of lower energy prices and a stronger euro.
• Eurozone GDP growth is projected at 0.9% for 2025, unchanged from March estimates, while the 2026 forecast was trimmed to 1.1%.
• Households with variable-rate mortgages and borrowers seeking new loans stand to benefit from the reduced cost of credit.
• The central bank warned that any further escalation in US-Europe trade tensions could push growth and inflation below these projections.