The European Central Bank needed to cut interest rates cautiously and gradually but further policy easing was likely coming given weakening price pressures, policymakers concluded last month, according to the accounts of their Dec 11-12 meeting.

The European Central Bank should continue to cut interest rates to reach 2% by the summer as the battle against inflation is practically won, Governing Council member Francois Villeroy de Galhau said.

Despite the rise in inflation, markets continue to anticipate aggressive ECB rate cuts in 2025, with a 25-basis-point reduction expected this month.

The European Central Bank will extend back-to-back interest rate cuts at least until July in an effort to shield the weak euro zone economy, which faces an imminent threat from U.S. tariffs, according to a majority of economists polled by Reuters.