ECB to cut key rate at June 5 meeting — Reuters

The European Central Bank (ECB) is almost certain to cut interest rates at its June 5 meeting. Meanwhile, analysts cited by Reuters expect the regulator to keep monetary policy unchanged in July, despite economic instability in the bloc exacerbated by EU–US trade tensions.

According to the news agency, inflation in the region has remained slightly above the Eurozone central bank’s 2% target for the past several months. However, underlying price pressures in the bloc have intensified. While this justifies future monetary policy easing, it casts doubt on the regulator’s next steps.

Economists surveyed by Reuters expect the ECB to cut borrowing costs by 25 basis points to 2% on June 5. Nevertheless, opinions are split regarding the bloc’s central bank’s future strategy: around 45% of respondents forecast another reduction after June, while nearly 30% believe the June cut will be the last.

Meanwhile, the eurozone economy is showing signs of improvement despite trade tensions. According to Reuters strategists' outlook, EU GDP will expand by 0.9% this year. Previously, only 0.8% was expected.