ECB Cuts Rates as Inflation Eases, But Trade Wars Loom
Source: www-ft-com.ezp-prod1.hul.harvard.edu
- The European Central Bank cut interest rates by a quarter-point to stimulate the eurozone economy amid falling inflation.
- Core inflation hit 2.7 per cent in September, nearing the ECB's 2 per cent target, while headline inflation dropped to 1.8 per cent.
- Markets now expect more cuts, but US tariffs threaten Europe's export-driven growth.
The European Central Bank lowered its key deposit rate to 2.25 per cent, its eighth cut since 2022, as eurozone inflation continues to moderate. ECB president Christine Lagarde highlighted progress towards the 2 per cent inflation goal but warned of risks from US trade policies under President Trump. This move aims to support growth in a region facing sluggish activity, and it signals confidence that inflation is under control despite external uncertainties.