The European Central Bank (ECB) is expected to announce its third consecutive interest rate cut this week to boost lending and support economic activity in the eurozone.
This follows aggressive rate hikes from mid-2022 aimed at curbing inflation, which has since eased as the region faces a weakening economic outlook.
Speculation initially suggested a half-percentage-point cut, driven by worse-than-expected data. However, most analysts anticipate a more measured quarter-point reduction with inflation rebounding above the ECB’s 2% target in November.
If confirmed, this would mark the ECB’s fourth rate cut since June, bringing the key deposit rate down to 3%. The decision comes amid political instability in the eurozone’s largest economies, further complicating the economic landscape.
The ECB’s move underscores its dual challenge of managing inflation pressures while supporting growth in the 20 euro-using countries.
