ECB Cuts Interest Rate to 3.5%

The European Central Bank (ECB) has lowered its key deposit rate by 25 basis points to 3.5%, marking its second rate cut this year as inflation shows signs of easing. President Christine Lagarde emphasized a cautious, data-driven approach, stating that future decisions will depend on incoming economic indicators and inflation trends. While current inflation rates are close to the ECB's target of 2%, Lagarde warned of potential rises later this year due to energy price fluctuations and labor cost pressures. The ECB's growth forecasts have been slightly downgraded amidst a deteriorating economic outlook, and Lagarde highlighted the importance of implementing structural reforms as outlined in a report by former president Mario Draghi. Analysts speculate that the next rate cut may occur in December, as the ECB prepares to navigate ongoing uncertainties in the eurozone economy. Lagarde reaffirmed that the path of rates is not predetermined and will be decided on a meeting-by-meeting basis.