As it was in June, the main deposit facility rate was lowered by 0.25 percentage points to 3.50%.
Financial markets were alerted to and expected the move, but there was little of a response in the money space since the ECB had not provided any indication of where rates would likely go in the future.
Although December is anticipated, Bank President Christine Lagarde told reporters that it would depend on the statistics because inflation was predicted to increase once more in the last quarter of 2024 after decreasing back to the 2% objective.
At a press conference, the European Central Bank (ECB), which sets monetary policy for the 20 countries that use the euro as a single currency, stated, “We are not pre-committing to a particular rate path.”
She stated, “We are looking at a whole battery of indicators,” adding that September was probably going to provide a low inflation number due to some energy components being excluded from the calculations.
It was still anticipated that inflation would only more sustainably reach its objective in the second half of the following year and that high rates of pay growth would continue to pose a threat to the rate of price growth due to persistent service inflation.
