ECB Cuts Rate to 2.75% Amid Economic Slowdown

The European Central Bank (ECB) has cut interest rates by a quarter point to 2.75%, marking the fifth reduction since June 2024, to stimulate the stagnant Eurozone economy. Despite recent increases in inflation to 2.4%, the ECB expresses confidence that inflation will stabilize near their 2% target. The Eurozone economy failed to grow in the last quarter of 2024, with major economies like Germany and France shrinking, prompting the ECB to ease borrowing conditions. Analysts note that the ECB's stance remains 'restrictive,' indicating potential for further rate cuts. Meanwhile, political uncertainties, such as potential US trade tariffs, add layers of economic challenge. The ECB is taking a data-dependent approach without committing to a specific future rate path, aiming to balance the need for economic support with inflation control.