Official announcements from the European Central Bank or major news outlets

ECB Makes Fourth Rate Cut to 3%, Signals More Easing Amid Slow Recovery

Dec 13, 2024, 07:16 AM

The European Central Bank (ECB) has cut its key interest rates by 25 basis points, lowering the deposit rate from 3.25% to 3%. This marks the ECB's fourth interest rate cut this year, aiming to spur lending and boost consumer spending and business investment amid mounting economic uncertainty in Europe. ECB President Christine Lagarde highlighted concerns over tepid growth and the impact of global trade policies, including uncertainties stemming from potential trade wars and crises in France and Germany. Officials such as Madis Muller and François Villeroy de Galhau indicated that more rate cuts are expected next year, with markets anticipating another 100 basis points of reductions. They emphasized that the period of strong inflation is behind us and forecast a slow economic recovery. The rate cut is expected to benefit borrowers with variable-rate mortgages, reducing their costs, while savings rates may decline. Despite the monetary easing, uncertainty remains the biggest enemy of economic growth in the region.