Overview

• Policy is on hold at a 2% deposit rate after roughly two percentage points of cuts through June, with decisions taken meeting by meeting.
• Chief Economist Philip Lane said a rise in downside risks would strengthen the case for a slightly lower policy rate to safeguard the medium-term target.
• Vice President Luis de Guindos said the current level of interest rates is appropriate given recent inflation trends.
• Traders are pricing almost no chance of another rate cut this year, reflecting cautious signals from policymakers.
• Officials warn that U.S. tariffs and a stronger euro could weigh on growth and pull inflation below target, keeping the risk balance in focus.