'More dovish' ECB rate cut seeks to bolster stagnant eurozone growth ahead of tariff tumult in 2025

Trade and political turmoil

Weaker growth across the eurozone has prompted the European Central Bank (ECB) to make one last interest rate cut in 2024 to shore up markets, as investors brace for more political instability, including Donald Trump’s potential tariff agenda.

On Thursday (12 December), the ECB cut interest rates by a quarter-point to 3%, settling the debate between analysts and strategists, who were split between a 25 and 50 basis point cut. This was the ECB's fourth snip for the year, following the commencement of the cutting cycle in June when the central bank reduced rates by 25bps, and proceeded with another two 25bps cuts in September and October. "The disinflation process is well on track," said Christine Lagarde, president of the ECB, who argued that central bank officials are expecting headline inflation averaging at 2.4% in 2024, ...