The European Central Bank on Thursday cut interest rates by a quarter of a percentage point, saying it expects inflation to fall back to its target later in the year and signaling that further easing is likely in coming months.

Germany’s inflation rate declined unexpectedly this month, though remains above the target of the European Central Bank, which this week cut its key interest rate. Consumer prices were 2.3% higher in January than the first month of 2024,

The European Central Bank cut interest rates again Thursday and signalled more to come as the eurozone economy flatlines, while warning of trade tensions and uncertainty amid US President Donald Trump's protectionist agenda.

European Central Bank policymakers backed further policy easing on Friday just a day after the bank's fourth straight rate cut, despite fresh surveys pointing to continued inflation momentum. The ECB cut interest rates to 2.

The European Central Bank lowered borrowing costs for a fifth time since June and while policymakers are confident the 2% inflation target is in reach, they are concerned about the euro zone’s stalling economy.

The central bank cut rates by a quarter point, as it rushes to brace a stagnant economy against President Trump’s threatened tariffs.

The European Central Bank cut interest rates on Thursday and kept the door open to further policy easing as concerns over lacklustre economic growth supersede worries about persistent inflation. It was the fifth ECB rate cut since June and markets expect two or three more this year,