ECB Eyes Further Rate Cuts Amid Easing Inflation and Sluggish Growth

The European Central Bank is considering further interest rate cuts as inflation eases towards its target. ECB President Christine Lagarde indicated that rate reductions would continue if growth remains weak. With inflation pressures reducing, the ECB aims for a neutral rate that neither stimulates nor restricts the economy.

The European Central Bank (ECB) may reduce interest rates further if inflation continues to approach its 2% target, ECB President Christine Lagarde announced on Monday. Given the current economic climate, restricting growth is deemed unnecessary, prompting potential further cuts on the already decreased rates.

According to Lagarde, if incoming data aligns with expectations, the ECB will likely proceed with lowering rates. The rationale behind this move is weak economic growth and moderated price pressures, with the bank aiming to reach a neutral rate level that balances economic stimulation and restraint.

The prospect of continued rate cuts is reinforced by financial experts' predictions, who foresee potential rate cuts in the forthcoming ECB meetings. With inflationary pressures in the service sector diminishing and wage growth stabilizing, the ECB is poised to tackle potential geopolitical risks that could exacerbate economic fragility.

(With inputs from agencies.)