The European Central Bank cut its economic growth expectations for the euro zone once more on Thursday and raised its projection for inflation this year, even as it predicted price growth back at target in 2026.

The European Central Bank cut its benchmark interest rate by a quarter point to 2.5% on Thursday as inflation nears 2% and growth remains weak. View on euronews

Easing for the sixth time since June, the ECB lowered its deposit rate to 2.5 per cent in a nod to slowing inflation and faltering growth

Consumer prices in the eurozone were 2.4% higher in February than a year earlier, a slower rate of inflation than recorded in January, reassuring policymakers ahead of Thursday’s meeting.

The European Central Bank cut interest rates as expected and kept the door ajar to more, even as a looming trade war with the US and plans to boost military spending drive Europe's biggest economic policy upheaval in decades.

Euro zone inflation dipped a bit less than expected last month but its most closely watched component also dropped, sealing the case for another ECB interest rate cut on Thursday and solidifying bets for further policy easing in the coming months.

Inflation in Europe eased to 2.4% in February, supporting the case for another interest rate cut from the European Central Bank but leaving open how far the central bank will go in lowering borrowing costs.

A broader move toward European rearmament would represent "a debt-financed fiscal expansion that would spur economic activity, allow some reflation, and cause the ECB to reconsider the extent of its policy rate cuts going forward," Thierry Wizman, global FX and rates strategist at Macquarie, said Tuesday.

Euro-area inflation eased, boosting confidence that it’s approaching the 2% target as the European Central Bank enters the last leg of interest-rate cuts.

Eurozone inflation eased to 2.4% in February but remained above forecasts, complicating the ECB’s rate-cut plans. Monthly price pressures, meanwhile, hit a 10-month high. View on euronews