The European Central Bank again cut interest

European The Central Bank (ECB) decided on Thursday to calculate 0.25 percentage points on its control interest. This is the fifth interest cut within six months.

The decision means that the interest rate is calculated to 2.75 %. The Council, which decides on monetary policy, justifies its decision, especially by easing the price pressures.

“We trust that inflation achieves [kahden prosentin] Our goal during 2025, ”said the ECB’s CEO Christine Lagarde at a press conference.

The decision of the Council to cut the control interest at 0.25 percentage points was unanimous.

Any Lagarde did not give, but once again stressed that the ECB would not be committed to any particular interest rate course. The financial markets believe the ECB will decline its control interest rate to 2.00 % by summer.

Reduction of monetary policy has a broad impact on the economy. It promotes economic growth as interest cuts are likely to increase household consumption and business investment.

Consumer prices In December, the inflation, or inflation, was 2.4 per cent in the euro area. Inflation accelerated slightly in the fall, but the central bank is predicted to slow down its two percent targets this year.

“The main reason is that the salaries and prices of some industries adapt to the earlier, very fast inflation with a considerable increasing amount of delay. However, the rise in wages is dampening as expected, and its effect on inflation has been partially attenuated by compromising on profits, ”said CEO Lagarde.

Inflation More to the central bank is caused by headaches of the euro area economy. According to preliminary information published by the European Union statistical authority on Thursday, euro area economic growth stopped in October -December.

Changes in GDP, which was leveled from seasonal fluctuations, were 0.0 % of the previous quarter. From a year ago, GDP increased by 0.9 per cent.

From the four largest national economy in the euro area, the economy grew from the previous quarter in Spain until the end of the year. In Germany, the economy declined by 0.2 per cent, French 0.1 per cent and in Italy the figure was 0.0 per cent. In Spain, the economy grew by 0.8 per cent.

According to the ECB, the euro area’s economy is in mind, but it estimates that the demand will strengthen as real income increases and the effects of tight monetary policy gradually subside.

The Central Bank predicts that the euro area economy will increase by 1.1 percent this year and the inflation will slow down to 2.1 %.

Director general However, he also warned of the weakness of the euro area economy.

“Consumers’ trust [talouteen] It’s fragile ”.

According to him, larger frictions in world trade can also burden the euro area economy, while impaired trust may slow down investment and consumption.

In addition, geopolitical risks may undermine the economy. In particular, the Russian offensive war in Ukraine and the Conflict of the Middle East can cause disturbances in the supply of energy.