The European Central Bank (ECB) announced a 25 basis point interest rate cut on Thursday for the fifth time since the central bank began easing monetary policy in June last year.
The cut took the ECB’s deposit facility to its main rate of 2.75%.
Markets had pegged the odds of a 25 basis point cut ahead of the announcement.
The ECB is struggling to balance the resurgence of inflation in the eurozone in recent months with sluggish growth in the region.
European inflation rose for the third straight month to 2.4% in December after falling below the central bank’s 2% target several months earlier. A rebound in inflation is expected as the underlying impact of lower energy prices fades.
Deutsche Bank’s European Chief Economist Mark Wall said there had been little change in the overall economic environment with the challenge of continued disinflation as expected.
He added that the ECB has no reason not to stop cutting interest rates at least to neutral and the central bank expects it to last until the end of the year.
