ECB can afford to shift from urgency to patience

Irene Lauro, Eurozone Economist at Schroders, gives her reaction to yesterday's European Central Bank (ECB) decision:

"While the ECB delivered a widely expected rate cut today, we would not count on a follow-up next month. 

"Inflation was lower than expected in May, with services inflation falling sharply. Yet, with no signs trade tariffs are weakening growth, we expect the ECB is likely to pause from today. Labour markets remain tight, domestic demand is gaining traction, lending is picking up, and fiscal tailwinds are building. 

"With rates now at the midpoint of their estimated neutral range, the bar for further cuts has risen. Having already eased by 1.75% in this cycle, the ECB can afford to shift from urgency to patience."

Irene Lauro

Media contact

Wim Heirbaut

Press and media relations, BeFirm

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Schroders is a global investment manager which provides active asset management, wealth management and investment solutions, with €941.8 billion of assets under management at 31 December 2024. As a UK listed FTSE100 company, Schroders has a market capitalisation of circa £6 billion and over 6,000 employees across 38 locations. Established in 1804, Schroders remains true to its roots as a family-founded business. The Schroder family continues to be a significant shareholder, holding approximately 44% of the issued share capital.

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