ECB cuts interest rates for the first time since 2019

Despite rising inflation

The European Central Bank has cut its main interest rate for the first time in almost five years, with a 25 basis points cut lowering the rate to 3.75%.

It follows a similar decision by central banks in Canada, Switzerland and Sweden, and is the first cut since the ECB's interest rate was negative.  The decision to cut rates came despite an uptick in inflation in the eurozone, which increased more than expected to 2.6% in May, up from 2.4% in April. "Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady," the ECB said. At the s...