The European Central Bank has cut interest rates again this year, cutting its main rate by 25 basis points. The move comes as economic growth in the eurozone slows and fears grow that new tariffs could be imposed by US President Donald Trump.
Borrowing costs fell across the 20-nation eurozone for the third time this year, when the European Central Bank cut its main interest rate to 2.25 percent in response to slowing growth and Donald Trump’s tariffs, the Guardian reports.
The Frankfurt-based bank cut its deposit rate by a quarter of a percentage point, in line with economists’ expectations, to counter the slowdown in the bloc and the impact of tariffs imposed earlier this month on all EU imports to the US.
In a statement after the move, the ECB’s Governing Council said the growth outlook had deteriorated due to rising trade tensions.
“Increased uncertainty is likely to reduce confidence among households and businesses, and the negative and volatile market reaction to trade tensions is likely to have a tightening effect on financing conditions. These factors could further weigh on the economic outlook for the euro area,” the European Central Bank said.
Meanwhile, all major inflation indicators have been falling, allowing for interest rate cuts.
