From October 23, 2024, the interest rates of the deposit facility, refinancing facility and marginal lending facility will be lowered to 3.25%, 3.40% and 3.65% respectively, the ECB said in a statement. published following the monetary policy meeting held in Ljubljana, Slovenia.
According to this press release, this decision is based on an updated assessment of the inflation outlook, the dynamics of underlying inflation, as well as the effectiveness of monetary policy transmission.
The ECB estimates that the disinflation process is progressing satisfactorily, with annual inflation falling to 1.7% in September in the euro zone, its lowest level since April 2021. However, a temporary rise in inflation is expected before a return to the 2% objective next year.
Economic activity, for its part, turned out to be weaker than expected, particularly in the manufacturing and real estate sectors, while household consumption remained below expectations despite an increase in income.
The ECB also highlighted the resilience of the labor market, with the unemployment rate stable at 6.4%, although a slowdown in employment growth is expected.
Furthermore, the ECB remains committed to bringing inflation back to its 2% target over the medium term and will continue to maintain restrictive rates for as long as necessary, adopting a data-driven approach, assessed at each meeting.
Last June, the ECB had already carried out its first relaxation of its three key rates since 2019, lowering the deposit rate from 4% to 3.75%, the refinancing rate from 4.50% to 4.25% and the marginal lending rate from 4.75% to 4.50%.
