European Central Bank Resolution, June 2025

The European Central Bank announced on Thursday that the price of an interest rate of 25 Basia and reduced inflation expectations at the back of the euro is stronger and low energy costs.

This takes the rate of deposit facilitation to 2 %, a decrease from the highest level in the middle of 2023 by 4 %. Before advertising, traders heard almost 99 % opportunity to reduce a quarter according to LSEG data.

“In particular, the decision to reduce the rate of deposit facilitation – the average through which the Governing Council is dependent on the position of monetary policy – depends on its updated evaluation of inflation expectations, and said the dynamics of basic inflation and the strength of monetary policy transmission,” said ECB in its statement.

European Central Bank President Christine Lagarde said during a press conference after the announcement that a member of the Governing Council had not supported the decision to reduce prices.

General Europe Stoxx 600 Initially, it was fixed after the announcement, before gaining gains for trading about 0.2 %, while the euro rose 0.6 % against the dollar.

Inflation in the euro area decreased to less than the average target of the European Central Bank in May, up to 1.9 % of the expected preliminary Data published earlier this week.

On Thursday, the European Central Bank issued its latest economic expectations, saying that it now expects inflation to an average of 2 % in 2025. This compares to 2.3 % march expectations.

The Central Bank said: “The descending reviews compared to March’s expectations, by 0.3 percentage points for 2025 and 2026, mainly reflects less assumptions for the strongest energy and euro prices,” the central bank said.

Meanwhile, the primary inflation up from the previous March estimate of 2.2 % was reviewed to 2.4 % expectation this year.

However, Lagarde pointed out that “the expectations for the inflation of the euro area are not usual.”

However, economic growth continued to be dull even as interest rates decreased. The latest estimate shows that in the first quarter of 2025, the euro area expanded by 0.3 %.

Lagarde Anet Wesbakh told CNBC that growth in the first quarter was “clearly giving the momentum to the growth that we see and expect in 2025.”

“I will not rule out a number of 0.3 to the top,” she added.

However, the President of the European Central Bank said that it would be “out of reach” to say that the central bank was confident, although in a “good place” after lowering prices.

The European Central Bank has left its growth expectations for a period of 2025 unchanged at 0.9 % due to the first three months that you expect from the year associated with weaker expectations.

The European Central Bank said: “While it is expected that the uncertainty surrounding commercial policies is expected to prove commercial investment and business exports, especially in the short term, the high government investment in defense and infrastructure will increase in the medium -term growth.”

The central bank’s decision comes in a decisive time for the economy of the euro region, as companies and policy makers face the increasing uncertainty in the wake of the growing geopolitical tensions.

The tariff policy for US President Donald Trump is a major concern, as duties are expected to affect economic growth. Some definitions of the sector may be struck in particular, Europe, as major industries such as steel and cars are affected.

Politics makers said that the impact of definitions on inflation is less clear and can depend on whether the European Union is due to whether it is, and how the European Union returns. Revenge measures of the European Union are currently stopping, but the leaders of the bloc said they are ready to implement it if necessary. The question marks also remain on how to affect defensive spending plans all over Europe on the economy.