According to Euro News: The European Central Bank (ECB) lowered its benchmark interest rate by 0.25% to 2.75% during its January meeting, effective February 5, 2025, amid sluggish economic growth and inflation approaching the 2% target. Rates for the deposit facility and marginal lending facility were also adjusted to 2.75% and 3.15% respectively.
The ECB emphasized a data-driven approach to future rate decisions, stating its commitment to stabilizing inflation at the 2% medium-term goal without pre-committing to a specific rate path.
This move comes after Eurostat reported a stagnation in eurozone GDP for Q4 2024, the weakest result since late 2023. Germany and France, the bloc’s two largest economies, contracted by 0.2% and 0.1%, respectively, defying earlier forecasts.
While broader EU growth edged up by 0.1%, Portugal (+1.5%) led among growing economies. Conversely, Ireland recorded the steepest decline (-1.3%). The ECB’s decision aligns with market expectations amid ongoing economic headwinds.
