Today’s news / ECB Cuts Interest Rate First Time Since 2019
The ECB will keep interest rates at a high level for as long as necessary to achieve an inflation rate below two percent, says Christine Lagarde at a press conference following the announcement that the ECB will lower interest rates. Photo: Kirill Kudryavtsev/Ritzau Scanpix

ECB Cuts Interest Rate First Time Since 2019

The European Central Bank (ECB) has lowered its interest rate by 0.25 percentage points to 3.75%, the first decrease since 2019 and the largest in 12 years. ECB President Christine Lagarde supported the cut after nine months of unchanged rates, acknowledging high inflation partly due to wage increases. The central bank aims to keep rates high to combat inflation above their 2% goal. Despite the reduction, ECB predicts average inflation to remain above the target, at 2.5% in 2024, and not fall below 2% until 2026. The cut is positive for variable-rate mortgage holders, matching market expectations of a new phase of ECB rate decreases.