Inflation in Europe eased to 2.4% in February, supporting the case for another interest rate cut from the European Central Bank but leaving open how far the central bank will go in lowering borrowing costs.

The European Central Bank (ECB) on Thursday lowered its three key interest rates by 25 basis points, meeting market forecasts. This marked the fifth consecutive rate cut since the ECB initiated its easing cycle last June. The key deposit rate now stands at 2.50%, its lowest level since early 2023.

The ECB cut interest rates by 25 basis points and updated the language in its decision to say monetary policy was becoming “meaningfully less restrictive.”

The European Central Bank has cut interest rates by another quarter percentage point, lowering credit costs for consumers and businesses to support an economy that is struggling to show solid growth.

The bank cuts rates from 2.75% to 2.5% but faces pressures from threatened US tariffs and plans to boost military funding.