The European Central Bank reduced its deposit facility rate by 25 basis points to 3.25% at its October 2024 monetary policy meeting, delivering a back-to-back cut that reflected the Governing Council's assessment that the disinflationary process was well on track, with recent downside surprises in activity indicators also affecting the inflation outlook.
The decision followed a reduction at the preceding meeting although the ECB said it would keep its data-dependent, meeting-by-meeting approach. The Governing Council said inflation was expected to rise in the coming months before declining to target in the course of 2025, and that it would keep rates sufficiently restrictive for as long as necessary.
ACTIVITY DATA
The decision rested on the ECB's updated inflation assessment, although weaker activity data also weighed.
Despite the consecutive cuts, the ECB said it would continue to follow a data-dependent, meeting-by-meeting approach and was not pre-committing to a particular rate path.