ECB to continue easing monetary policy in second half of 2025 — Barclays

Barclays analysts expect the European Central Bank (ECB) to continue cutting borrowing costs in the second half of the year. Despite ECB President Christine Lagarde's suggestions that the monetary easing cycle might be nearing its end, strategists anticipate 25 basis-point rate cuts in both September and December.

Barclays believes that a majority of the ECB Governing Council members will support further easing based on current economic data.

Inflation in the eurozone dropped to 1.9% year-on-year in May, falling below the European Central Bank's 2% target. The core rate declined from 2.7% in April to 2.3%.

Barclays experts forecast the Consumer Price Index (CPI) will slow to 1.4% in early 2026, before stabilizing at 1.7%.

The EU's GDP grew by 0.6% in the first quarter, according to the organization. However, strategists have questioned the ECB's baseline growth forecasts, which remain unchanged at 0.9% for 2025 and were only marginally revised downward for 2026.