Following the European Central Bank's decision to lower interest rates, Gaston Reinesch, President of the Luxembourg Central Bank, confirmed that further cuts are likely in the coming months.

Gaston Reinesch, President of the Luxembourg Central Bank (BCL), stated on Thursday that the European Central Bank (ECB) is expected to continue cutting interest rates in the coming months.

The ECB reduced its key interest rate to 3% on Thursday, a move prompted by inflation nearing its target and a downward revision of the growth forecast.

Reinesch anticipates additional rate reductions in 2025. "If we are truly at our goal for a 2% inflation target, it would not be unreasonable for the current 3% rate to gradually decrease to 2.5% by early spring," he explained. He noted, however, that uncertainties remain regarding the ECB's future decisions.

In October 2024, Luxembourg residents secured an average fixed interest rate of 3.53% on home loans, compared to a variable rate of 4.28%.

Lower interest rates are now seen as crucial for supporting the property market in Luxembourg, and while some support measures will continue into 2025, property prices may rise again.