BCE cuts interest rates by 0.25 percentage points.

BCE announced a decrease in interest rates by 0.25 percentage points.

The European Central Bank (ECB) announced the third consecutive reduction in interest rates, cutting them by 0.25 percentage points, with the deposit rate falling to 3.25%, as reported on Notícias ao Minuto.

This measure aims to combat inflation, ensuring that it returns to the 2% target in the medium term. The ECB reaffirms the commitment to maintain rates sufficiently restrictive until the goal is achieved.

Despite progress in the disinflation process, the ECB highlights that financing conditions remain tight, reflecting concerns about credit access and financing costs for businesses and consumers.

In addition, the ECB warns of a temporary rise in inflation in the coming months. This increase will be driven by the continued growth of wages, which, although slowing down, still remain at high levels. However, wage pressures are expected to gradually decrease, with company profits absorbing some of the impact of inflation.  

The Central Bank anticipates inflation to return to the 2% target over the next year.

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