The European Central Bank (ECB) has reduced key interest rates by 25 basis points, a decision announced following the April policy meeting and aligned with market expectations. Consequently, the interest rate on the main refinancing operations is now 2.4%, while the marginal lending facility and the deposit facility rates are 2.65% and 2.25%, respectively.
Key observations from the ECB policy statement include: Inflation trends have progressed as anticipated, with both headline and core inflation exhibiting a decline in March. The Euro area economy has demonstrated increasing resilience to global shocks; however, the growth outlook has weakened due to escalating trade tensions. Heightened uncertainty is projected to negatively impact household and firm confidence, and adverse market reactions to trade tensions are likely to tighten financing conditions. These factors may further exert downward pressure on the Euro area’s economic outlook.
