The European Central Bank has cut its benchmark interest rate to 2.25%, marking the seventh consecutive decrease amid ongoing growth concerns influenced by rising trade tensions linked to U.S. tariffs. After adjusting rates upwards to combat high inflation between 2022 and 2023, the priority has now shifted to staving off potential economic downturns. The uncertainty regarding U.S. tariffs, particularly those proposed by President Trump, has heightened fears over reduced business activity and a sluggish eurozone economy that saw only a 0.2% growth last quarter.
The European Central Bank cut its benchmark rate to 2.25%, the seventh consecutive cut, driven by concerns over growth amid rising trade tensions.
ECB President Christine Lagarde previously hinted at a pause in rate cuts, but Trump's tariff proposals have increased uncertainty and economic worries.
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