ECB Reduces Interest Rates Amid Trade Concerns

The European Central Bank (ECB) implemented another reduction in interest rates on Thursday, responding to anxieties that potential trade conflicts initiated by US President Donald Trump could impede economic expansion within the eurozone.

ECB authorities opted to decrease rates by a quarter of a percentage point, signifying the sixth successive decrease in borrowing expenses for nations utilizing the single currency.

This decision has effectively lowered the ECB’s key deposit rate to 2.25 percent, marking its nadir since the onset of 2023.

Monetary policymakers have been gradually easing borrowing costs throughout the eurozone as inflationary pressures have moderated, moving closer to the ECB’s preferred target of two percent.

However, the ECB noted in a statement that while inflation is trending favorably, “the economic growth outlook has weakened due to escalating trade tensions.”