Eurozone inflation to stabilise at the 2 per cent target of ECB

Eurozone inflation could be a touch higher this year than earlier thought but will then stabilise at the European Central Bank's 2 per cent target, the bank's Survey of Professional Forecasters showed on Tuesday.

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The ECB cut interest rates for the seventh time in a year on Thursday, arguing that disinflation was well on track and risks were on the rise that price growth comes even lower than earlier thought.

The ECB's survey, often a key input into policy deliberations, showed 2025 inflation averaging 2.2 per cent, above the 2.1 per cent predicted three months ago while the 2026 number was lifted to 2.0 per cent from 1.9 per cent.

However, these numbers may be less significant than in the past since the ECB’s cut off for collecting projections was April 4 and financial markets have shifted significantly since then due to the US's erratic trade policy.

The euro has firmed sharply against the dollar and energy prices have fallen, changes that could significantly slow inflation.