European Central Bank cuts rates again as inflation declines across the Eurozone

Posted on October 18, 2024   |  

The European Central Bank (ECB) has cut interest rates again, moving faster to reduce borrowing costs as eurozone inflation slows more quickly than expected.

The ECB lowered rates by a quarter point, following a similar cut in September, marking the first time it has made back-to-back cuts since starting its rate reduction cycle.

The ECB’s benchmark deposit rate, which peaked at 4%, has now dropped to 3.25% after the latest cut.

Consumer prices in the eurozone increased by 1.7% in September, slightly below the earlier estimate of 1.8%.

The ECB had previously raised rates rapidly to fight high inflation triggered by the pandemic and the Russian invasion of Ukraine.

Weakness in the eurozone economy has prompted the ECB to lower borrowing costs to help ease the burden on households and businesses.

These rate cuts are part of the ECB’s strategy to support economic recovery and control inflation.