The Governing Council decides to cut the ECB's three key interest rates by 25 basis points. The decision to cut the deposit facility rate - the rate through which the Governing Council steers the monetary policy stance - is based in particular on its updated assessment of the inflation outlook, underlying inflation dynamics and the strength of monetary policy transmission.
The process of disinflation is well under way. Inflation continues to evolve broadly in line with staff projections and should return to the Governing Council's medium-term target of 2 % over the course of this year. Most measures of core inflation suggest that inflation will stabilize around the target on a sustained basis. Domestic inflation remains high, mainly because wages and prices in some sectors are still adjusting to the past surge in inflation with a considerable lag. However, wage growth is expected to moderate and profits are partly dampening the impact on inflation.
The recent interest rate cuts by the Governing Council are gradually making new loans cheaper for businesses and households. At the same time, financing conditions remain tight, not least because monetary policy remains restrictive and past interest rate increases continue to feed through into lending volumes, with some maturing loans being rolled over at higher rates. The economy is still facing headwinds, but rising real incomes and the gradually fading effects of restrictive monetary policy should support a recovery in demand over time.
The Governing Council is committed to ensuring a sustainable stabilisation of inflation at its medium-term objective of 2 %. It will take a data-driven, meeting-by-meeting approach in determining the appropriate monetary policy stance. In particular, the Governing Council's interest rate decisions will be based on an assessment of the inflation outlook in the light of incoming economic and financial data, underlying inflation dynamics and the strength of monetary policy transmission. The Governing Council does not commit itself in advance to a particular interest rate path.
Key ECB interest rates
The Governing Council decided today to cut the ECB's three key interest rates by 25 basis points. The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will therefore be reduced to 2.75 %, 2.90 % and 3.15 % respectively with effect from 5 February 2025.
Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP)
The portfolio of APP and PEPP is declining at a measurable and predictable pace, as the Eurosystem no longer invests principal repayments on maturing securities.
Refinancing operations
On 18 December 2024, the banks repaid the remaining amounts borrowed under the targeted longer-term refinancing operations, completing this part of the balance sheet normalisation process.
ECB/ gnews - RoZ
English 
Czech 
Spanish 
French 
Italian 
German 
Russian