Official announcements from the European Central Bank

ECB Cuts Rates to 3% Amid Economic Uncertainty, Adjusts Growth Forecasts

Dec 13, 2024, 04:10 AM

The European Central Bank (ECB) has cut its key interest rates by a quarter of a percentage point, marking the fourth reduction this year. This decision, which lowers the deposit rate to 3%, comes amid concerns about weakening economic growth in the eurozone, political instability in France and Germany, and the potential impact of new U.S. import tariffs under President-elect Donald Trump. The ECB's move aims to support economic recovery by making borrowing cheaper, thereby encouraging consumer spending and business investment. Despite the rate cut, the ECB has revised its growth forecasts downwards, expecting the eurozone GDP to grow by 0.7% in 2024, 1.1% in 2025, and 1.4% in 2026. Inflation is projected to average 2.4% this year, 2.1% next year, and 1.9% in 2026, indicating a stable disinflation process. The ECB's actions reflect a cautious approach to monetary policy, balancing the need for economic stimulus with the ongoing battle against inflation.