The European Central Bank on Thursday announced a 25-basis-point interest rate cut taking the deposit facility rate to 2%

The European Central Bank cut its three key interest rates by 25 basis points on 5 June 2025, lowering the deposit facility rate to 2.00% and the main refinancing and marginal lending rates to 2.15% and 2.40%, respectively, effective 11 June 2025. The ECB said the move reflected its updated assessment of the inflation outlook, underlying inflation dynamics, and monetary policy transmission, noting that inflation was then around its 2% medium-term target. The decision marked a continuation of the ECB’s easing cycle that began in June 2024, after a long period of restrictive policy to bring inflation down from earlier highs. The cut mattered because the deposit facility rate is the ECB’s main policy lever for steering the stance of euro-area monetary policy, so changes to it can affect borrowing costs, financial conditions, and growth expectations across the bloc.

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