The main ECB refinancing rate also fell by 0.25% to 3.15% and core inflation is expected to come in at 2.4% in 2024, falling to 1.9% in 2026.
Nicholas Hyett, Investment Manager at Wealth Club said, “Inflation continues to fall in the Euro area, freeing the ECB up to keep rates moving downwards. So far so good.
However, the economic recovery is now expected to be slower than previously hoped, with Euro area GDP growth expected to come in at 0.7% for 2024. The ECB is hoping that lower rates, together with improving household incomes, mean that growth will pick up in the years ahead.
European investors will be looking across the pond at the US with envy. However, given the political challenges the bloc is facing at the moment, a modestly growing economy with easing inflation is far from the worst possible outcome.”
