Reuters cite five sources as saying the ECB may begin cutting rates again later in 2025
The European Central Bank is expected to keep rates unchanged in September, but officials may revisit the possibility of further cuts later in the year if economic conditions deteriorate, sources told Reuters.
Christine Lagarde had signaled in July that the ECB was comfortable holding its key rate at 2%, effectively ending a year of rate cuts. Recent data show the euro zone economy is holding up better than expected, with inflation steady at the 2% target.
U.S. tariffs on EU imports, set at 15% by the Trump administration, aligned with ECB expectations and avoided worst-case scenarios, reducing the case for an immediate cut. Still, the ECB’s forecasts assume another cut at some stage, and discussions could pick up again at the October and December meetings—especially if U.S. tariffs hit exports or the war in Ukraine drags on.
While some see a chance of cuts as early as spring 2026, investors have turned more upbeat on the euro zone after summer surveys showed stronger business activity. But policymakers caution this may be temporary, with U.S. buyers front-loading orders to dodge tariffs.
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The Bank next meet on September 11:
