The European Central Bank on Thursday cut interest rates by a quarter-point, responding to signs of deteriorating activity and weakening inflation despite bond-market turmoil over plans for a splurge of spending.

European Central Bank President Christine Lagarde said she would not pre-commit to a rate path, amid "huge uncertainty" ahead.

European Central Bank policymakers see a growing chance of a pause in their easing cycle at their next meeting before rates come down again, once they have greater clarity about trade and fiscal policy,

The European Central Bank is set to cut interest rates again on Thursday in what is likely to be its last easy decision for a while as trade wars and rearmament drive the continent's biggest economic policy upheaval in decades.

The market now expects less than three ECB rate cuts this year; the market had expected more than three cuts earlier this week. There has also been an increase in the ECB’s neutral rate from 1.8% at the start of this week, to 1.97% on Wednesday. The market is also starting to price in rate hikes from early 2026.

The monetary chief told reporters in Frankfurt on Thursday that a huge increase military spending is likely to boost the economy

(Bloomberg) -- The European Central Bank doesn’t have a role in helping governments finance more defense spending and will stick to its mission of price stability, President Christine Lagarde said.

Pledges of support: Five days after Zelenskyy was ejected from the White House following a clash that led to the US suspending military aid and intelligence support to Kyiv, he was promised “enduring” support by all but one of the bloc’s leaders.