MNI BRIEF: ECB Cuts Key Rates, Leaves Guidance Unchanged
MNI (LONDON) - The European Central Bank cut its key interest rate by 25 basis points to 2.75% on Thursday, in line with expectations, and said inflation should return sustainably at target this year.
The language in the statement was barely changed, with the Governing Council saying there is no set rate path for rates, and that coming decisions would be made meeting-by-meeting and remain data-dependant, though the direction of travel is clear. (See MNI SOURCES: ECB Cuts Consensus, But Trump, Fiscal Risks Ahead )
"Inflation has continued to develop broadly in line with the staff projections and is set to return to the Governing Council’s 2% medium-term target in the course of this year," the statement said, noting that "domestic inflation remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay, although wage growth is moderating as expected, and profits are partially buffering the impact on inflation."