The European Central Bank (ECB) headquarters
The European Central Bank (ECB) cut its main interest rate in line with the expectations for the monetary policy meeting on Thursday, as inflation is on the right track.
The bank said in its monetary policy press release the Governing Council today decided to lower the key ECB interest rate by 25 basis points (bp) to 2.25%.
Moreover, the interest rates on the main refinancing operations and the marginal lending facility have been decreased to 2.40% and 2.65% respectively.
This is the seventh consecutive rate cut this year, aimed at supporting the struggling Eurozone economy amid the trade war launched by US President Donald Trump against most countries around the world.
The Governing Council’s decision was based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.
The bank added in the release that rising uncertainty could undermine household and business confidence, and that negative and volatile market reactions to trade tensions are likely to negatively impact financing conditions.
It noted that wage growth is moderating; however, the euro area economy has been building up some resilience against global shocks, but the outlook for growth has deteriorated owing to rising trade tensions.
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