The European Central Bank (ECB) on Thursday cut its benchmark rate by 0.25 percentage points to 2.25%, continuing its easing cycle even as uncertainty from U.S. President Donald Trump’s tariff policy continues.
The move by the Frankfurt-based bank was expected by economists, with inflation easing to just 2.2% in March, close to the ECB’s 2% target.
A rate cut could offer relief to the sluggish eurozone economy, which is under pressure from Trump’s widening tariff measures.
Despite a 90-day pause on a blanket 20% tariff on EU imports, a new 10% base levy on global imports remains in force, along with 25% duties on cars, steel and aluminium.
The cut to the bank’s benchmark deposit rate – which influences borrowing costs for banks and savers across the 20-nation euro area – is the ECB’s seventh since June 2024.
