5 days ago
European Central Bank expected to cut interest rates later today
THE EUROPEAN CENTRAL Bank is expected to cut interest rates by a quarter of a percentage point today.
It would be the bank's eighth interest rate cut in the last 12 months, with officials having shifted focus from taming consumer price rises to easing pressure on the sluggish eurozone economy.
Expectations that the Frankfurt-based institution will deliver a fresh rate cut were strengthened this week when data showed eurozone inflation eased to 1.9% in May, faster than expected and below its 2% target.
'Any doubts about an ECB interest rate cut this week have now been eliminated,' said Dirk Schumacher, chief economist at German public lender KfW.
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Analysts expect another quarter-point reduction that would take the central bank's key deposit rate to 2%.
The reduction would be welcome news for tracker mortgage holders, who would benefit immediately from the move, along with other borrowers.
Despite falling ECB rates, Ireland is the fifth most expensive country in the eurozone for mortgages, with Irish homebuyers paying 0.46 percentage points more than the average interest rate on new mortgages across the euro zone, according to a recent Central Bank report.
Observers will be on the lookout for any hints from ECB President Christine Lagarde at her press conference that policymakers could hit pause at their next meeting in July, as some expect.
The ECB's series of cuts stands in contrast to the US Federal Reserve, which has kept rates on hold recently amid fears that Trump's levies could stoke inflation in the world's top economy.
With reporting from
© AFP 2025
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