ECB hits pause on rate cuts but markets eye another reduction in September

Since July 2022, the ECB implemented 10 interest rate hikes, the last one announced in September 2023 and tracker mortgage customers have carried the full weight of these increases.

The president of European Central Bank Christine Lagarde Pic: AP Photo/Michael Probst

The European Central Bank held its main lending rate steady at 4.25% at its latest monetary policy meeting but analysts expect at least one more rate reduction this year.

The European banking regulator reduced interest rates by 0.25% last month but experts predicted a consecutive cut was unlikely as eurozone inflation remains stubbornly above the ECB’s target of 2% and wage growth continues to fuel inflationary pressures.