European Central Bank Cuts Rates for Second Time in Three Months

Published On Sep 12, 2024, 8:17 AM

The European Central Bank (ECB) cut interest rates to 3.5% from 3.75% in response to slowing inflation and pressure to support the struggling economy. This marks the second rate cut in three months as economic growth remains weak, partly due to low consumer spending. ECB president Christine Lagarde indicated that while the rate cut was necessary, the bank is cautious about further reductions, citing persistent inflation concerns in the services sector.

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The ECB's recent rate cut is likely to provide a short-term boost to European economic activity, particularly in sectors sensitive to interest rates. However, the ongoing monitoring of inflation may limit the extent of future rate cuts, keeping a cautious tone in the market.

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Sep 12, 2024, 8:17 AM

The reduction, to 3.5 percent from 3.75 percent, comes as inflation has slowed and the bank faces pressure to bolster the region’s flagging economy.

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