ECB Interest Rate Cuts: A Look into the Future
The DekaBank predicts a reduction of the European Central Bank’s (ECB) deposit rate to 1.75% by September 2025. This expectation follows the interest rate cuts already implemented by the ECB in the early months of 2025.
Most recently, the ECB lowered the deposit rate on June 5, 2025, from 2.25% to 2.00%, marking the eighth consecutive rate cut.
Impact on Financial Markets and Savers
The deposit rate is an important key interest rate for banks that influences short-term rates and the overall interest level in the market. Another cut signals a continued loose monetary policy aimed at supporting the economy, particularly in light of an inflation rate close to the target value of two percent.
For savers, this means lower returns on bank deposits and overnight money accounts, potentially reducing the incentives to save. Investors may be compelled to seek higher-yielding alternatives.
Lending and Economic Implications
Falling key interest rates could make loans cheaper, potentially promoting investments. However, the ECB has indicated that the interest rate cut cycle may be largely concluded, which makes DekaBank’s current forecast for September uncertain.
This forecast heavily depends on further economic developments and inflation dynamics.
In summary, the anticipated reduction of the ECB deposit rate remains a signal for the continuation of monetary easing in Europe – with widespread implications for markets and savers.