European Central Bank Lowers Interest Rates By 25-Basis Points

The European Central Bank (ECB) has lowered interest rates by a further 25-basis points as signs emerge of an economic slowdown on the continent.

The central bank for the 20 countries that use the Euro currency lowered its benchmark interest rate to 3.25% from 3.50%. It was the third rate cut by the ECB since June of this year.

The reduction in interest rates comes as inflation across Europe declines significantly.

Consumer price inflation fell below the central bank’s 2% target in September and is currently at 1.8%, its lowest level since 2021.

At the same time, economic growth across Europe continues to slow and remains tepid compared to the U.S.

Economic growth in Europe’s two biggest economies, France and Germany, has been particularly slow in recent months. Some data points to a possible recession in Germany.

Deutsche Bank (DBK) has forecast that the European Central Bank will lower its benchmark interest rate to 2.25% by June 2025.