The ECB cut the deposit facility rate by 25 bps to 3.5% to ease monetary policy restrictions, reflecting an updated inflation outlook and better transmission of policy. Also, the interest rates on the main refinancing operations and the marginal lending facility were lowered to 3.65% and 3.90% respectively staring from September 18th. The ECB remains committed to bringing inflation back to its 2% target, adjusting rates based on data and economic conditions without committing to a specific rate path. Inflation projections remain in line with previous forecasts: 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026, though a short-term rise is expected as energy price drops fade from annual comparisons. Core inflation is projected to decline from 2.9% in 2023 to 2.0% in 2026, despite slightly higher services inflation. Domestic inflation pressures are still elevated due to rising wages, but moderating labor costs and firm profits help cushion the impact. source: European Central Bank
The benchmark interest rate In the Euro Area was last recorded at 3.65 percent. Interest Rate in Euro Area averaged 1.84 percent from 1998 until 2024, reaching an all time high of 4.75 percent in October of 2000 and a record low of 0.00 percent in March of 2016. This page provides - Euro Area Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Euro Area Interest Rate - data, historical chart, forecasts and calendar of releases - was last updated on September of 2024.
The benchmark interest rate In the Euro Area was last recorded at 3.65 percent. Interest Rate in Euro Area is expected to be 3.65 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Euro Area Interest Rate is projected to trend around 2.40 percent in 2025, according to our econometric models.
Euro Area Interest Rate
In the Euro Area, benchmark interest rate is set by the Governing Council of the European Central Bank. The primary objective of the ECB’s monetary policy is to maintain price stability which is to keep inflation below, but close to 2 percent over the medium term. In times of prolonged low inflation and low interest rates, ECB may also adopt non-standard monetary policy measures, such as asset purchase programmes. The official interest rate is the Main refinancing operations rate.
| Actual | Previous | Highest | Lowest | Dates | Unit | Frequency | ||
|---|---|---|---|---|---|---|---|---|
| 3.65 | 4.25 | 4.75 | 0.00 | 1998 - 2024 | percent | Daily |
News Stream
ECB Cuts Rates as Expected
The ECB cut the deposit facility rate by 25 bps to 3.5% to ease monetary policy restrictions, reflecting an updated inflation outlook and better transmission of policy. Also, the interest rates on the main refinancing operations and the marginal lending facility were lowered to 3.65% and 3.90% respectively staring from September 18th. The ECB remains committed to bringing inflation back to its 2% target, adjusting rates based on data and economic conditions without committing to a specific rate path. Inflation projections remain in line with previous forecasts: 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026, though a short-term rise is expected as energy price drops fade from annual comparisons. Core inflation is projected to decline from 2.9% in 2023 to 2.0% in 2026, despite slightly higher services inflation. Domestic inflation pressures are still elevated due to rising wages, but moderating labor costs and firm profits help cushion the impact.
2024-09-12
ECB to Reduce Interest Rates for 2nd Time
The ECB is expected to cut borrowing costs by 25bps in its September 2024 meeting, a second reduction this year, after a similar move in June, followed by a pause in July. That would bring the deposit facility rate to 3.5%. The main refinancing operations rate and the marginal lending rate are expected to be cut by a bigger 60bps, bringing the rates to 3.65% and 3.9% respectively, as part of technical adjustments following a change in the operational framework announced in March. The moves come against the backdrop of a decline in Eurozone inflation to 2.2%, the lowest level since July 2021, with core inflation also moderating to 2.8%. Wage growth has decelerated and GDP growth for Q2 was revised downwards to 0.2%. Investors will be looking for hints about future ECB actions and further rate cuts, with many predicting a 25bps reduction in the key deposit rate every quarter until September next year. In addition, new economic forecasts will be unveiled.
2024-09-12
ECB Postpones Rate Cut Decision Until September
At their July meeting, European Central Bank policymakers decided not to rush into cutting interest rates, preferring to wait until September to reassess their policy stance, according to the meeting's accounts. The ECB left rates unchanged in July and provided little guidance on future policy actions, despite growing market expectations for a rate cut on September 12. Policymakers noted the challenge of gradually easing restrictive policy without harming the economy by keeping rates too high for too long. The accounts indicated that the September meeting would be an ideal time to re-evaluate the level of monetary policy restriction, emphasizing the importance of approaching that meeting with an open mind. This cautious approach reflects the ECB's desire to balance economic support with inflation control.
2024-08-22
