The European Central Bank lowers the interest rate – as expected

The European Central Bank (ECB) is lowering its key interest rate, i.e. the deposit rate, by 0.25 percentage points to 3.50 percent.

The ECB is motivating the rate cut by saying it is another step towards a reduced tightening of monetary policy.

In June, the ECB lowered the interest rate for the first time since 2019, to 3.75 percent, and then left it unchanged in July.

The inflation forecast remains unchanged, but the figure for core inflation is slightly higher for this year and next year. The ECB refers to a stronger upward price pressure than expected in the service sector.

The ECB's economists are also lowering the GDP forecast for the eurozone to 0.8 percent growth this year, down from 0.9 percent. For 2025, the GDP forecast is lowered to 1.3 percent from 1.4 percent. The ECB is also lowering the forecast for 2026 to 1.5 percent from 1.6 percent.

The stock market and the exchange rate of the krona against the euro are virtually unchanged after the announcement.