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ECB Council sets course for interest rate cuts
The ECB is keeping the key interest rate stable: Find out whether a change in rate is in the offing and how this could affect consumers and companies.
ECB Council sets course for interest rate cuts
The European Central Bank (ECB) has decided to leave the key interest rate in the euro area unchanged at 4.5 percent, as was recently announced. Although the current key interest rate remains in place, the ECB is indicating a possible imminent interest rate cut. This move could occur if inflation approaches target and an easing of monetary tightening is deemed appropriate.
The ECB last raised interest rates in September 2023 to counteract inflation. However, inflation rates have fallen since then, fueling discussion about a possible policy change. Such a move could reduce the cost of loans, thereby benefiting property buyers, home builders and businesses.
The ECB is aiming for an annual inflation rate of two percent in the medium term to ensure price stability. Higher inflation rates can affect consumers' purchasing power. The decision to cut interest rates will depend on various factors, including the development of the inflation rate, energy prices and wage growth.
The possible interest rate cut by the ECB could have an impact on savers, as fixed deposit interest rates have already fallen noticeably. It is expected that interest rates will continue to fall, both for fixed-term deposits and for overnight deposits. Higher interest rates can make borrowing more expensive and slow the economy, while lower interest rates can stimulate the economy.