ECB Cuts Rates Amid Eurozone Growth Concerns

The European Central Bank has reduced interest rates, signaling a hopeful stance towards avoiding a eurozone recession. Despite inflation falling below its target for the first time in three years, concerns about economic slowdown, especially in Germany, persist. Interest rate path remains data-dependent.

The European Central Bank (ECB) has announced another cut in interest rates, lowering the benchmark rate to 3.25% as it aims to sustain economic growth amid falling inflation. This decision comes as inflation in the eurozone dips to 1.7% in September, the first sub-2% rate in three years.

Though ECB President Christine Lagarde emphasized a cautious, data-driven approach to future rate adjustments, she expressed optimism about avoiding a recession. The decision was made in the backdrop of slowing economic growth and weaker-than-expected manufacturing and export data.

Some economists predict further cuts may be necessary, especially given economic challenges in Germany. This situation underlines the difficult balancing act central banks face globally, striving to control inflation without stifling growth.

(With inputs from agencies.)