4:47 18 April 2025
ECB cuts rates amid trade concerns
The European Central Bank (ECB) has lowered its key interest rates by 25 basis points, reducing the deposit rate to 2.25%, the main refinancing rate to 2.40%, and the marginal lending rate to 2.65%. This move comes as inflation in the eurozone has significantly dropped, with the Harmonised Index of Consumer Prices (HICP) falling to 2.2% in March, near the ECB's target of 2%.
However, ECB President Christine Lagarde cautioned that the economic outlook remains uncertain due to escalating global trade tensions. These tensions could hinder growth by reducing exports, investment, and consumption. While the eurozone is more resilient to global shocks, financial markets face heightened risk, and the increased defense spending in EU countries may support growth without significantly affecting inflation. The ECB remains prepared for further unpredictability.
