ECB Cuts Interest Rates by 25 Basis Points to 3%, Fourth Cut This Year, Signals More Cuts and 2% Inflation Target

Dec 13, 2024, 07:19 AM

The European Central Bank (ECB) has implemented its fourth interest rate cut of the year, reducing key rates by 25 basis points, including a decrease in the deposit rate from 3.25% to 3%. This marks the ECB's third consecutive reduction as it seeks to stimulate lending and bolster consumer spending and business investment amid growing economic uncertainty. ECB President Christine Lagarde and other officials have expressed concerns about slow economic recovery and the impact of external factors, including trade policies. Governing Council member Madis Muller noted that the period of strong inflation is behind Europe, with expectations for inflation to stabilize around 2%. Additionally, ECB officials indicated that further rate cuts could occur in 2025, with markets anticipating another 100 basis points of reductions. The ECB remains committed to addressing the economic challenges facing the region, emphasizing the need for reforms in public finances, particularly in France.