ECB to Pause Easing Cycle Amid Trade Uncertainty

2025-07-24 06:54 By Joana Ferreira 1 min. read

The European Central Bank is expected to hold interest rates steady on Thursday, likely marking the end of its current easing cycle after eight cuts over the past year that brought borrowing costs to their lowest levels since November 2022.

The main refinancing rate remains at 2.15%, while the deposit facility rate stands at 2%.

Policymakers are expected to adopt a wait-and-see approach as they assess the impact of persistent trade uncertainty and potential US tariffs on economic growth and inflation.

Adding to the cautious stance, inflation finally reached the ECB’s 2% target in June and is now forecast to dip below that level later this year, remaining subdued for the next 18 months, driven by a combination of a strong euro, falling energy prices, and cheaper imports from China.

Markets are currently pricing in just one more rate cut by December, with roughly a 50% probability of that move occurring in September, before a possible shift back toward tightening in late 2026.



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