17-Oct-2024 17:58

The ECB Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate ' the rate through which the Governing Council steers the monetary policy stance ' is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. Accordingly, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 3.25%, 3.40% and 3.65% respectively, with effect from 23 October 2024. The incoming information on inflation shows that the disinflationary process is well on track. The inflation outlook is also affected by recent downside surprises in indicators of economic activity. Meanwhile, financing conditions remain restrictive. Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation. The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner.

Powered by Commodity Insights