ECB cuts interest rates to 3.5% amid softer inflation figures and faltering growth

Second cut in 2024

The European Central Bank has cut interest rates by 25 basis points to 3.5%, meeting market consensus.

This was the ECB's second rate cut one this year following a 25bps reduction in June. It came on the back of faltering economic growth and softer eurozone inflation, with the latter dropping to 2.2% last month. Eurozone inflation drops to 2.2% in August According to the central bank's Governing Council, inflation is expected to pick up again later this year, "partly because previous sharp falls in energy prices will drop out of the annual rates", before declining towards the ECB's 2% target in the second half of 2025. "The Governing Council will continue to follow a data-depende...