The European Central Bank cut interest rates as expected on Thursday and kept the door ajar to more, even as a looming trade war with the U.S. and plans to boost military spending drive Europe's biggest economic policy upheaval in decades.

LISBON (Reuters) -European Central Bank policymaker Mario Centeno said on Friday he expects inflation to fall to its medium-term target of 2% in a sustainable manner since euro zone inflation is "almost out of the woods". Speaking at a conference in Lisbon, Centeno said the euro zone was on its way to normalizing monetary policy.

A 25 basis point cut to the ECB deposit facility rate is widely anticipated, marking the seventh cut in the current cycle. Click to read.