The European Central Bank (ECB) Thursday lowered its key interest rates for the third time this year, continuing to ease monetary policy amid weak growth in the eurozone and inflation falling below the bank’s 2% target.
Eurostat data released on Thursday showed September inflation at 1.7%, down from an initial estimate of 1.8% and August’s 2.2%. This marks a decline from 4.3% in September 2023.
The ECB announced it would reduce its three key interest rates by 25 basis points. Effective 23 October, the deposit facility rate will be 3.25%, the main refinancing operations rate 3.40%, and the marginal lending facility rate 3.65%.
This marks the first consecutive rate cut in 13 years, signalling the ECB’s shifting focus towards supporting economic growth as the eurozone lags behind the United States.
The central bank began its easing cycle in June, paused in July, and resumed cuts in September and October.
In its September meeting, the ECB downgraded its growth forecasts, projecting GDP growth of just 0.8% in 2024 and 1.3% in 2025.
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