ECB Eyes Rate Reductions: A Move Towards Economic Stability

The European Central Bank may continue reducing interest rates as inflation approaches its 2% target. ECB leaders Christine Lagarde and Isabel Schnabel confirmed potential cuts, signaling a gradual decrease in borrowing costs. This decision aims to stabilize the euro zone economy amid waning inflation concerns after recent data trends.

The European Central Bank stands poised for further interest rate cuts if inflation aligns with its 2% target, key ECB officials indicated on Monday.

President Christine Lagarde and chief policy figure Isabel Schnabel emphasized potential reductions in borrowing costs as euro zone economic activity slows and inflation fears diminish. Speaking in Vilnius, Lagarde underlined the ECB's readiness to ease rates further based on consistent data.

With euro zone inflation at 2.3% last month, the ECB aims for a 2% level next year after recent surges linked to geopolitical tensions. Schnabel highlighted the importance of steady rate cuts to maintain balance while cautioning against using monetary policy to address structural issues.

(With inputs from agencies.)