The European Central Bank lowered all three of its key interest rates by 25 basis points on 17 April 2025. The deposit facility rate moved to 2.25%, the main refinancing operations rate to 2.40% and the marginal lending facility rate to 2.65%, with the new levels taking effect on 23 April. The decision was published in the ECB’s official monetary-policy release. The announcement was also covered in Euronews’ report of 17 April.
Why the council lowered rates
The ECB said its decision rested on the updated inflation outlook, the behaviour of underlying inflation and the strength of monetary-policy transmission. Headline and core inflation had both declined in March, while services inflation had eased over recent months. The bank said wage growth was moderating and that profits were partly absorbing the effect of still-elevated wage growth on prices.
The council also described the disinflation process as being on track toward its 2% medium-term target. That wording matters because the decision was not presented as a response to a single monthly number. It combined several measures of price pressure with an assessment of how earlier rate increases were passing through to households and companies.
Trade tensions changed the growth picture
Even as the inflation assessment improved, the ECB said the outlook for growth had deteriorated because of rising trade tensions. The release did not translate that risk into a fixed estimate of future policy. Instead, it reiterated that subsequent decisions would depend on incoming economic and financial data.
- Deposit facility: 2.25% from 23 April 2025.
- Main refinancing operations: 2.40% from 23 April 2025.
- Marginal lending facility: 2.65% from 23 April 2025.
What the release did not promise
The ECB said it remained ready to adjust its instruments within its mandate and that the Transmission Protection Instrument remained available for disorderly market dynamics. Those statements preserve flexibility; they are not a calendar for additional cuts. Businesses planning investment or working-capital needs therefore had to separate the immediate rate change from assumptions about the next meeting.
The decision also confirmed that the APP and PEPP portfolios would continue to decline at a measured and predictable pace because principal payments from maturing securities were no longer being reinvested. Taken together, the announcement combined a lower policy rate with a continued reduction in the bond portfolios. The historical message was therefore one of easing in the policy rate while retaining a data-dependent stance.
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