ECB cuts key interest rates

As had been widely expected, the ECB Governing Council decided today to cut the three key interest rates by 25 basis points. It was clear from the press release that the ECB wanted to keep speculation about further interest rate cuts at bay. Reference was made to the continuing high price pressure and the still elevated wage growth. It was also confirmed that the ECB Governing Council would decide from meeting to meeting depending on the data situation. We continue to expect an interest rate cut in September and two further rate cuts of 25 basis points by the end of the year.