ECB cuts rates by 25 basis points, as expected
The European Central Bank cut interest rates on Thursday by 25 basis points, as expected, to 3%.
This marked the fourth cut this year.
The ECB also ditched its reference for the need to keep monetary policy "restrictive", suggesting there are more rate cuts on the cards.
It said: "The Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
"In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path."
The Bank said the disinflation process "is well on track". It sees headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027. Excluding energy and food, the ECB expects an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
Carsten Brzeski, global head of macro at ING, said: "Looking ahead, the risk for the ECB will now be that while it is still highly guided by the past mistake of underestimating inflation and reacting too late, it could now end up overestimating growth and being too late to react again."
Earlier on Thursday, the Swiss National Bank surprised markets with its biggest interest rate cut in nearly a decade. The SNB cut its interest rate from 1% to 0.5% - the lowest level since November 2022. Economists were expecting a 25 basis points rate cut.