The ECB has scheduled its first monetary policy meeting of 2025 on January 30. The ECB will be likely to cut interest rates by 0.25 percentage points during the meeting, lowering the deposit facility rate to 2.75%, its fifth consecutive reduction since the easing cycle began in June 2024.
Recent trends in inflation in the eurozone indicate stability, as it was reportedly recorded to be 2.4% in December, the lowest among all major economies. Meanwhile, severe pressure on inflation in the services sector remains, which leaves the ECB afraid of changing the rates.
Economic growth in the eurozone has been slow. GDP growth for the fourth quarter is only forecast at 0.1%. This casts some doubts on whether lowering rates really helps the economy and inflation. Market expectations seem to be of a total of 100 basis points in rate cuts throughout 2025, with more cuts being expected in meetings ahead.
The officials of the ECB state that future interest rate decisions will be taken based on the latest economic data and inflation trends. They have mentioned the need to balance inflation with economic growth, emphasizing President Christine Lagarde and Chief Economist Philip Lane. Approaching the ECB meeting, the rate decision will be important for economic activity and future monetary policy in the eurozone.


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