European Central Bank to accelerate rate cuts this year — Bloomberg poll

A recent Bloomberg poll indicates that economists anticipate further rate cuts from the European Central Bank (ECB) in 2025. Experts predict interest rates to dip below 2% as inflation is likely to fall below the regulator’s target level by early 2026.

Analysts foresee sequential reductions in borrowing costs in June and September, which would bring the deposit rate down to 1.75% from the current 2.25%. These projections are supported by updated inflation forecasts that suggest price growth to average between 1.7% and 1.8% in the first half of 2026, down from earlier estimates of 1.9%.

This revision to the CPI assessment is attributed to the tightening of US trade policies, including tariffs, enacted under the Donald Trump’s administration. Slower economic growth in the eurozone also took its toll. These factors, combined with declining energy prices and a strengthening euro, call for more stimulus from the ECB.

While interest rates are set to fall temporarily, economists expect their gradual recovery to 2% by early 2027. However, long-term forecasts for the third quarter of 2027 remain unchanged.