European Central Bank cuts interest rates for second time this year

The European Central Bank (ECB) has cut interest rates across the 20-member eurozone for the second time this year to bolster economic activity, as Europe braces for Donald Trump to impose damaging tariffs on EU exports to the US, Report informs via The Guardian.

The Frankfurt-based rate setter cut its benchmark deposit rate by a quarter of a percentage point to 2.5%, in line with City economist expectations, as Trump prepares to impose 25% tariffs on all goods imported from the EU, in line with similar actions taken against Canada and Mexico.

“The disinflation process is well on track,” the ECB declared as it announced its decision. “Inflation has continued to develop broadly as staff expected, and the latest projections closely align with the previous inflation outlook.”

After six cuts in the cost of borrowing in the last year, ECB officials are understood to be hesitant about going further while the international situation remains volatile and the recent fall in inflation could reverse.