European Central Bank cuts rate for the first time in 5 years

The European Central Bank at yesterday's meeting decided to cut the benchmark interest rate by 0.25 bps, the first cut since 2019. It is now set at 4.25%. This is stated in the final statement of the regulator. At five previous meetings the rates remained unchanged, reports Investing.com.

The ECB found it necessary to soften monetary policy after 9 months of stable rates. As noted in the document, its decision is based on the changed forecasts of price growth, the dynamics of core inflation and the effectiveness of current measures.

Since September last year, inflation has fallen by more than 2.5 p. p. In core terms, it has also decreased, indicating that price pressure has eased and that expectations of price growth in the future have become more moderate.

The main European indices reacted with growth - German DAX added 0.38%, British FTSE 100 - 0.47%, French CAC 40 - 0.42%.