The European Central Bank is set to cut interest rates again on Thursday. After cutting borrowing costs rapidly over the past nine months as inflation retreated and economic growth faltered, the euro zone's central bank has telegraphed another 25 basis point reduction in the deposit rate.
In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.