Official ECB announcements and press releases

ECB Lowers Rates to 3.25% in Third Cut This Year Amid Slowing Growth and Persistent Inflation

Oct 17, 2024, 12:23 PM

The European Central Bank (ECB) has cut interest rates by 25 basis points, lowering the deposit facility rate to 3.25%, the main refinancing rate to 3.4%, and the marginal lending facility rate to 3.65%. This marks the ECB's third rate cut this year amid concerns over slowing economic growth and persistent domestic inflation in the eurozone. The central bank stated that the disinflationary process is "well on track" but expects inflation to rise in the coming months before declining to its 2% medium-term target next year. Despite elevated wage growth and strong wage pressures contributing to high domestic inflation, financing conditions remain restrictive. The ECB will continue to follow a data-dependent, meeting-by-meeting approach and is determined to keep rates "sufficiently restrictive for as long as necessary." ECB President Christine Lagarde remarked that incoming data suggest economic activity is weaker than expected, with households consuming less than anticipated and investment expanding slowly. She noted that risks to growth are tilted to the downside, and geopolitical tensions pose an upside risk to inflation. Nevertheless, the labor market remains resilient.