The European Central Bank cut interest rates as expected on Thursday but hinted at a pause in its year-long easing cycle after inflation finally returned to its 2% target. The ECB has lowered borrowing costs eight times,

The ECB’s rate cuts have drawn the attention of President Trump, who has criticized the more cautious stance of Federal Reserve Chair Jerome Powell.

Looking further forward, the ECB is forecasting an inflation rate of just 1.6 per cent for 2026, meaning it would undershoot its medium-term inflation target of 2 per cent.