ECB cuts key policy rates by 25 basis points

Risks to the euro area economy have increased due to rising tensions in global trade

The European Central Bank (ECB) has cut three key interest rates by 25 basis points. This is stated in the regulator’s report.

Thus, starting April 23, the deposit rate will be 2.25%, the main refinancing rate will be 2.4%, and the margin lending rate will be 2.65%.

As noted, the process of disinflation is proceeding properly. Inflation continued to develop in line with the expectations of the ECB staff, with both headline and core inflation declining in March.

Most indicators of core inflation indicate that it will remain steady at the level of the ECB Governing Council’s medium-term target of 2%.

The regulator notes that the eurozone economy is building up some resilience to global shocks, but growth prospects have deteriorated due to increased trade tensions.

“Rising uncertainty is likely to reduce confidence among households and companies, and the negative and volatile market reaction to trade tensions is likely to have a tighter impact on financing conditions. These factors could further worsen the economic outlook for the euro area,” the ECB said in a statement.

As GMK Center reported earlier, inflation in the euro area in March 2025, according to preliminary data from Eurostat, increased by 2.2% compared to the same month in 2024. Thus, the indicator slowed down compared to February, when it was +2.3% y/y.