FRANKFURT — The European Central Bank cut its key deposit rate by 25 basis points to 2.50 percent, but its boss, Christine Lagarde, said the Bank may pause cuts as growing uncertainty clouds the economic outlook.

The European Central Bank cut interest rates again on Thursday but warned of "phenomenal uncertainty" including the risk that trade wars and more defence spending could fuel inflation, raising the prospect of a pause in its policy easing next month.

European Central Bank officials are bracing for tough negotiations over whether to cut interest rates further or hold fire when they next set borrowing costs in April, according to people familiar with their thinking.