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The projected lighting, which marks the 75th anniversary of the Schuman Declaration, in the Grozmarhal building in the headquarters of the European Central Bank in Frankfurt, Germany, May 9, 2025.
Alex Kraus/Bloomberg via Getty Images
The European Central Bank is everything, but it is guaranteed to trim its main interest rate on Thursday.
According to LSEG, the markets last time prices for about 99% of the chances for the 25th base. This would require a deposit rates up to 2%high in mid-2013 at 4%.
But Europe is facing a very uncertain economic worldview, raising the question of what the ECB can do outside the meeting on Thursday.
Inflation now hovers again around the 2% Central Bank target with Flash —Dees On Tuesday, showing consumer prices in the euro area, they rose by only 1.9% in May. Meanwhile, economic growth was still sluggish: gross domestic product in the eurozone increased by 0.3% in the first quarter of 2025, according to the latest assessment.
The block faces many unknown both at home and abroad. This includes US President Donald Trump’s tariff program – widely regarded as a negative impact on growth – and potential steps in view of the European Union, as well as on how basic plans of the coming posterior level of the EU and the EU and the plans of posture and the relief, as well as the basic plans. A great fiscal change in Germany could play.
Here’s what analysts say about the following steps of the Central Bank, and what they can mean for consumers.
Evaluate the forecast for the rest of the year
Analysts and economists are widely expected to reduce the interest rate from the ECB at the end of the year, but do not count on the bank to give strong instructions where to send.
Inflation figures on Tuesday increased the chances that after this week the next finish could come back in July, said Jack Allen-Rynolds, the deputy chief economist of the euro.
Others impressed the more cautious tone, and last week, Barclays economists suggested that the rate reduction was on the horizon but will not be implemented as soon as.
“We believe that the ECB will remain non-profit on its political path and still fulfills the approach to the meeting to maintain flexibility and optional in policy calibration,” they said.
They also expect a greater decline from the ECB, predicting two more declines of 25 basic points in September and December, which means that the ECB will have stable rates for the summer months.
Elsewhere, in the Bofa Global Research report published earlier this week, the ECB “ended in the reasons not to go below 2%”, repeating the proposal on the further reduction of the rate on the horizon.
But, it was noted, the ECB is unlikely to give hints at how low it can go.
“We expect some recognition that the door is open to moving the tariffs below 2%, but a very obvious signal is unlikely. The uncertainty in the tariffs will give the Council the ruling council enough to cover,” the statement reads.
The main thing is that the ECB will also publish its latest forecasts this week, emphasizing that it expects inflation and economic growth. This happens after the last report on the economic economic viewing of the organization on economic cooperation and development, predicting growth by 1% and 2.2% inflation for the eurozone this year.
As a decrease in rates may affect consumers
For consumers, a greater decrease in ECB speed will mainly affect borrowing and savings.
How exactly this is played for them depends on what type of products they store, and how long the rates on them, Bas van Geffen, senior macro -stratega raboresearch, said CNBC.
For example, he said, a 10-year-old fixed mortgage and demand deposit will influence differently.
“The interest rate on short-term deposits is seeking to monitor the deposits quite carefully,” he said.
“A week after the ECB meeting, the policy rate comes into force. Thus, if the ECB will reduce the deposit rate on Thursday, banks will receive 0.25% smaller by their deposits in the Central Bank. This can reduce the interest rate, which they pay at the savings,” Van Geffen explained.
According to him, products with fixed long-term rates have a more complex relationship with the interest rates of the Central Bank, as they are determined not only by the current policy-something often changes in but future expectations.
“This week, the market has long been waiting for the ECB to reduce rates. So, it can already be included in long-term interest rates to a certain extent. This also means that these long-term rates do not necessarily change after the political decision of this week,” said Van Geffen.
