ECB Cuts Rates Again as Inflation Hits Three-Year Low

The European Central Bank (ECB) has reduced its main interest rate for the third time this year, cutting it from 3.5% to 3.25%.

The move follows a significant decline in inflation, which fell to 1.7% in September, its lowest level in three years. The easing of inflationary pressure left the ECB with room to adjust rates downward.

Signs of the rate cut had been evident prior to the decision, as ECB officials, including President Christine Lagarde, suggested it could be on the horizon.

The central bank initially started trimming rates in June, with a follow-up reduction in September, aiming to support economic activity in a stagnating eurozone. Markets now anticipate another rate drop in December.

The backdrop to the ECB’s actions includes slow economic growth and stagnant third-quarter GDP projections. Lower rates aim to address these challenges while spurring investment, potentially benefiting equity markets and riskier assets such as Bitcoin.