The European Central Bank (ECB) made its fifth consecutive interest rate cut, lowering the key rate to 2.75% in response to weakening economic growth in the eurozone. Despite inflation remaining close to the ECB's 2% target, with a December rate of 2.4%, there are conflicting opinions among policymakers about future inflation dynamics. Some caution against persistent inflationary pressures, especially in the services sector, while others warn that prolonged high borrowing costs may lead to too low inflation. The eurozone economy stagnated in the last quarter, pressuring the bank to stimulate growth without overly relying on monetary policy.
The European Central Bank cut interest rates for the fifth consecutive time to foster economic growth amid persistent inflationary pressures in the eurozone.
With annual inflation at 2.4%, slightly above the 2% target, policymakers face a complex landscape of differing views on future inflation risks.
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