ECB cuts key interest rates by 25 bps as inflation eases

The move, driven by updated inflation forecasts and improved monetary policy transmission, reflects confidence that inflation is converging towards the ECB’s 2 per cent medium-term target. March data showed a continued decline in both headline and core inflation, with services inflation easing significantly and wage growth moderating, the Council said in a statement.

However, the ECB flagged rising trade tensions and market volatility as key risks to euro area growth, warning that tighter financing conditions and increased uncertainty may dampen household and business confidence.

The ECB reiterated its commitment to a data-dependent, meeting-by-meeting approach, with no pre-commitment to a fixed rate path.

ALCHEMPro News Desk (KD)