Reports from Eurostat and major financial analysts

ECB to Cut Rates by 25 Basis Points, Aiming to Stimulate Eurozone Economy

Dec 12, 2024, 08:18 AM

The European Central Bank (ECB) is poised to cut interest rates for the fourth time this year on Thursday, December 12, 2024, amid expectations of further monetary easing in 2025. The decision comes as inflation in the eurozone approaches the ECB's target of 2%, with the rate currently at 2.3% in November, and as the region's economy shows signs of faltering. Analysts anticipate a reduction of 25 basis points, bringing the deposit facility rate down to 3%. This move is expected to provide relief for mortgage holders, particularly those with tracker mortgages, and could stimulate economic activity by making borrowing cheaper. The ECB's actions are influenced by global economic uncertainties, including the potential impact of Donald Trump's upcoming presidency in the United States, which could introduce new trade policies affecting the Eurozone. Despite some internal debate within the ECB on the extent of rate cuts, the consensus leans towards a cautious approach to maintain flexibility in future monetary policy.