European Central Bank cuts growth and inflation projections as rates held steady

Summer rate cuts shift into view

The European Central Bank has once again held its key interest rates steady, as the prospects of summer rate cuts come into view amid lower growth and inflation forecasts.

After ten consecutive rate hikes, the central bank's key rate has remained unchanged at 4% since September 2023, up from -0.5% in June 2022. The latest ECB staff projections now see economic growth at 0.6% in 2024, down from a previous forecast of 0.8%, with economic activity expected to remain "subdued" in the near term. Inflation forecasts have also been revised down thanks to a lower contribution from energy prices. Staff now project inflation to average 2.3% in 2024, down from 2.7%, then hitting 2% in 2025 and 1.9% in 2026.  Christine Lagarde: European Central Bank likely to cu...