ECB’s Simkus expects reduction in interest rates by regulator towards year-end

According to a statement by ECB official Gediminas Simkus to Reuters, another interest rate cut will most likely occur later this year. He justifies his position by citing the financial regulator's lack of information, including trade outlook data, needed to make decisions regarding borrowing costs.

Following seven consecutive rate cuts by the regulator during the previous and current year, the ECB is hinting at pausing its cycle of monetary policy easing. This was influenced by inflation stabilizing near the target level in the region and ongoing negotiations between Eurozone countries and the US government.

Commenting on current developments, the head of Lithuania's Central Bank suggested a likely pause this month and noted a potential policy shift by the regulator closer to September. The ECB's June forecast also showed that this year's inflation rate in the region will reach 2.0%, then decline to 1.6%. For 2027, the bank's experts expect the indicator to return to the 2.0% level.