Looking further forward, the ECB is forecasting an inflation rate of just 1.6 per cent for 2026, meaning it would undershoot its medium-term inflation target of 2 per cent.

The ECB’s rate cuts have drawn the attention of President Trump, who has criticized the more cautious stance of Federal Reserve Chair Jerome Powell.

Traders are increasingly confident the European Central Bank will pause its run of interest rate cuts now that the central bank sees itself as well-positioned to deal with global economic uncertainty