ECB rate cut likely in March, more to follow—Simkus

European Central Bank (ECB) policymaker Gediminas Simkus, who is also the Governor of Lithuania’s central bank, signalled that interest rates could be cut again in March 2025, with further reductions expected in the following months.

Speaking to reporters on Monday, Simkus stated that the ECB was still some way from the neutral rate, which neither stimulates nor constrains economic growth.

Simkus’ comments followed the ECB’s recent decision to cut rates for the fifth time last week, with many policymakers anticipating another move in March before a more comprehensive reassessment at the ECB’s April meeting. While he did not specify the timing, Simkus suggested that the March rate cut would not be the final one, with “a couple more decreases” likely to follow, depending on economic data.

The policymaker also addressed the uncertainty surrounding the potential impact of US tariffs on EU imports. He warned that the tariffs posed a threat to both economic growth and inflation, though he refrained from speculating on the exact effects, noting that the EU’s response would be crucial in determining the outcome.

Attribution: Reuters

Subediting: Y.Yasser