European Central Bank (ECB) Interest Rate Outlook

AMSTERDAM (Reuters) – The European Central Bank (ECB) is likely to continue cutting interest rates at least through the first half of 2025, to a level between 2% and 3%, Dutch ECB governing council member Klaas Knot stated on Tuesday.

Knot expressed in an interview with Dutch TV programme Nieuwsuur, “I would expect us to continue to gradually reduce interest rates in the coming time, also in the first half of 2025.”

He added, “I don’t expect rates to return to the extremely low levels we saw before the pandemic. They will likely end up on a somewhat more natural level. I don’t know where exactly, but somewhere starting with a 2.”

Earlier this month, the ECB lowered its deposit rate by 25 basis points to 3.50%, following up on a similar cut in June.