European Central Bank cuts rates for 7th time in a | Australian Markets

The European Central Bank has cut curiosity rates for the seventh time in a row to counter worries about financial growth fuelled by President Donald Trump’s tariff onslaught.

“The outlook for growth has deteriorated due to rising trade tensions,” the bank mentioned on Thursday.

It cited “exceptional uncertainty” in regards to the future financial scenario, saying future charge selections can be taken on a assembly by assembly foundation.

The bank’s transfer ought to help financial exercise in the 20 international locations that use the euro currency by making credit more inexpensive for customers and companies.

The bank’s rate-setting council determined at a assembly in Frankfurt to decrease its benchmark charge by a quarter share level to 2.25 per cent.

The bank has been steadily chopping rates after raising them sharply to fight an outbreak of inflation from 2022 to 2023.

Now that inflation has fallen, growth worries have taken centre stage.

The economic system in the 20 international locations that use the euro grew a modest 0.2 per cent in the final three months of 2024.

Inflation was 2.2 per cent in March, close to the bank’s goal of 2 per cent.

The cut was broadly anticipated by analysts given the sudden shadow solid over the eurozone’s growth outlook by Trump’s April 2 announcement of unexpectedly high tariffs, or import tax, on items from different international locations beginning at 10 per cent and ranging as high as 49 per cent.

The European Union faces a 20 per cent tariff.