The European Central Bank lowered its key rates on Thursday June 6 for the first time since 2019, offering a breath of fresh air to households and businesses, but also warned that the future would be uncertain due to the volatility of inflation.
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“ The drop in rates is justified by confidence in the path ahead. I expect the economy to continue to recover »: The words of the President of the European Central Bank, Christine Lagarde, this Thursday. As promised, the ECB has indeed delivered a first reduction in its key rates, by 0.25 points. The announcement had been expected since last fall.
The ECB’s last rate cut dates back almost five years, in September 2019, in a very different context of negative rates and very low inflation.
The euro zone has since experienced a peak in inflation in the fall of 2022, in the wake of the Russian war in Ukraine and shortages of goods post-Covid-19 crisis, forcing the ECB to launch an unprecedented rate hike. in July 2022.
After a pause on rates for nine months during which inflation slowed by more than 2.5 percentage points, to show 2.6% in May, the governing council judged “ timely » to make a gesture of appeasement on the rent of money, according to its press release.
Read alsoFor the ninth time in a year, the ECB raises its key rates
A breath of fresh air for European economic players, such as households and businesses who want to borrow. But a breath of fresh air is still very light, analyzes Philippe Waechter, director of economic research at Ostrum Asset Management:
What will be important is to see what happens next, to see if this drop in rates is accompanied by a further reduction in interest rates. And at that point, the impact could be significant for bank loans, for example
However, it is not certain that there will be further cuts in key rates soon. The President of the European Central Bank wants to be very cautious. Inflation is falling again in the euro zone, but “ the next few months will continue to be hectic », affirms Christine Lagarde:
I cannot confirm that we are in this process of easing key rates, although there is a strong probability. What is very uncertain is how fast we will go, and how long it will take. We need to have enough data on disinflation.
Several top ECB officials are already arguing in favor of a pause next month. As the next window of opportunity for a relaxation of key rates, they suggest September.
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