The ECB lowers the main deposit rate to 3.25% from 3.50%
The main ECB refinancing rate also fell to 3.4% from 3.65%
The cut is the second in as many meetings
Revised annual inflation figures for the Euro Area came in at 1.7% in September, down from 1.8%
Isaac Stell, Investment Manager at Wealth Club said:

“The ECB has today lowered the main deposit rate to 3.25% and the refinancing rate to 3.4%, its second cut in just five weeks as the fight against inflation seems to be coming to a close.

The cut by the ECB follows todays revised annual inflation numbers for September which came in at 1.7% rather than the 1.8% initial estimate, down from the 2.2% recorded in August. The rate is now meaningfully below the banks 2% target.

The ECB is now likely to switch its focus from fighting inflation to its new opponent, fighting weak economic growth. The lacklustre growth in the Euro Area, which expanded by just 0.2% in the three months to June 2024, highlights the need for a turnaround in fortunes. With Germany currently on the ropes, having seen its GDP contract by 0.1% during the same period, the ECB have swung from the hip, to help stave off any further economic blows.

Only time will tell if the latest medicine will help to heal the economic bruises, stimulate demand and leave the Euro Area ready for another round.”