BRUSSELS / LONDON , Dec 26 (AA/APP/DNA):European central banks cut their rates this year, albeit slowly, as inflation declined towards each country’s targets.

After rapid rate hikes over the previous two years in the face of high inflation, the first monetary easing steps were taken in the second half of 2024, though not collectively by all European central banks. Many countries’ central banks remained cautious even though core inflation had returned to more reasonable levels.

The European Central Bank (ECB) had raised its key interest rates at 10 consecutive meetings beginning in July 2022.

At the beginning of 2024, the ECB’s refinancing rate was at a record high of 4.5% and its marginal lending facility rate at 4.75%.

In June, the ECB lowered its key interest rates for the first time in five years, cutting all three policy rates by 25 basis points in a bid to stimulate the eurozone economy through cheaper borrowing costs.

The landmark decision was followed by continuing rate cuts, and the bank ended the year with four in total, lowering its deposit facility rate to 3%, main refinancing rate to 3.15%, and marginal lending facility rate to 3.4%.

The decision came after slow economic growth in the eurozone and inflation going down towards the 2% target.

Analysts say the bank may cut its rates to 1.5% by the end of 2025, while the market expectation is for a total cut of 100 basis points next year.

Meanwhile, the Bank of England (BoE) had kept its policy rate fixed at 5.25% since August 2023 until it lowered it by 25 basis points in August 2024 as annual inflation came in at 2.2%. The bank left its policy rate unchanged at 5% in September and cut it again in November by 25 basis points, leaving it unchanged in December.

Analysts estimate that the BoE may move a little faster in rate cuts next year and lower the policy rate to 3.75% by the end of it.

The Swiss National Bank led the monetary easing cycle among the developed countries this year, cutting its policy rate by 25 basis points in March 2024 at its first meeting of the year due to the appreciation of the Swiss franc. The bank also cut its policy rate in June, September and December, lowering it to 0.5%.

Norway’s central bank, Norges Bank, wrapped up 2024 with no changes, keeping its policy rate at 4.5% since December 2023, the highest in the last 16 years. The bank said it is necessary to reach the 2% inflation target sustainably, pointing to March 2025 for its first rate cut.

Norway’s annual inflation rate was at 2.4% in November, marking its lowest level since 2020.

Meanwhile, Sweden’s central bank, the Riksbank, cut its policy rate by 25 basis points from 4% to 3.75% in May. In December, the bank cut its policy rate by 25 basis points to 2.50%, ending the year with a total cut of 150 basis points.