Economists in the ECB's Survey of Professional Forecasters now see inflation next year at 1.9%, below the 2% predicted three months ago, and see it holding at 1.9% in 2026. This is somewhat quicker than the ECB's own forecast, which puts inflation back at target only in the final quarter of 2025, and sees the year's average at 2.3%.

The move means the main interest rate was reduced by 25 basis points to 3.25 per cent, down from a peak of four per cent which was reached last September.

Economists expect the ECB to continue rate cuts, aiming for 2% by mid-2025. Lagarde's focus on downside inflation risks and weak growth signals further easing.