Overview

• The European Central Bank (ECB) cut the deposit rate by 0.25 percentage points to 2.5%, marking its sixth reduction since mid-2024.
• The move is intended to stimulate the sluggish eurozone economy by making borrowing cheaper for businesses and households.
• Savings returns continue to decline, with average German day-to-day savings rates dropping to 1.48% in February, the steepest monthly fall since 2012.
• ECB officials remain divided on future rate cuts, with some cautioning against further action due to potential inflation risks and geopolitical uncertainties, including U.S. trade policies.
• While inflation in the eurozone has eased significantly from its 2022 peak, it stood at 2.4% in February, slightly above the ECB's target of 2%.