"After eight consecutive rate cuts, the ECB has decided to leave rates unchanged this month. In the past year, the ECB has halved rates from 4% to 2%, now matching inflation, meaning that we may soon be reaching the end of the cutting cycle – the so-called 'terminal rate' – as the economy begins to stabilise.
"The rate pause is a promising signal for those in private equity and M&A, keeping the door open to cheaper financing options and stronger returns. However, the ongoing uncertainty surrounding EU trade talks with the US means that the writing isn't yet entirely on the wall. Firms and funds should use the current climate to their advantage where they can, but avoid overextending in case of future disruption."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
