The European Central Bank lowers crucial interest rates by 0.25%.
The interest rate for temporarily borrowing money, the marginal lending rate, decreased by 0.25 percentage points to 4.5%. The associated interest rate for savers is now 3.75%.
In an uncommon sequence, the European Central Bank (ECB) raised significant rates by ten times in a row between the middle of 2022 and October 2023 to control excessive inflation. Since then, the rates have remained the same.
The inflation has lessened, "which intensifies the signs that the price pressure has loosened," detailed the ECB. Since the inflation expectation has substantially improved since September 2023, decreasing the key interest rates is suitable.
The ECB Council aims to restore a 2.0% inflation rate. During May, the inflation rate in the euro area was 2.6%, which was 0.2 percentage points higher than in April. In October 2022, inflation peaked at 10.6%. The ECB will maintain the key interest rates as restrictive as necessary to achieve the two-percent objective.
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The key interest rate for temporarily borrowing money, previously at 4.75%, was reduced by the European Central Bank (ECB) in Frankfurt am Main, to 4.5%. This decrease of 0.25 percentage points, follows the ECB's aim to combat the lowered inflation rate. The ECB mentioned that the percentage of inflation has reduced since September 2023, making it suitable to lower the key interest rates. The current inflation rate in the euro area stands at 2.6%, which is 0.2 percentage points higher than in April.
