The European Central Bank cut some of its growth and inflation projections on Thursday as the fallout from a global trade war is likely to prove a drag for the 20-nation euro zone. Inflation is now seen falling further below the ECB's 2% target next year as lower energy costs,

Eurozone inflation fell to 1.9% in May, below forecasts, boosting expectations of an ECB rate cut on Thursday. Core inflation also eased to 2.4%. The euro slipped and bond yields fell as markets priced in a 25bp rate cut to 2.

The European Central Bank cut its key interest rate to the lowest level since early 2023, a response to slowing inflation and threats to growth from President Trump’s trade war. The move deepens a divergence with the U.