ECB Cuts Rates, but Growth Slows Down
Bank of Europe decided to trim its main refinancing rate by a neat quarter‑point, bringing it down to 3.15%. That means interest‑rate headaches are a little less painful, at least for now.
On the inflation front, we’re looking at a gentle decline: 2.4% core price rise in 2024, dropping further to 1.9% by 2026. So, the Euro area’s price‑inflation trend is heading in the right direction.
Nicholas Hyett’s Take—Financial Insider weighs in
- “Inflation’s on a downward slide, giving the ECB room to keep lowering rates. So far so good.”
- “However, the recovery isn’t as speedy as we’d liked. Euro‑area GDP is projected to grow a modest 0.7% in 2024.”
- “The hope? Lower rates plus rising household incomes will give growth a lift in the coming years.”
Why US Investors Are Eye‑Rolling
European investors might feel a little envious of what’s happening across the Atlantic. Yet, with the political turbulence inside the bloc, a gentle economic upswing paired with easing inflation is a pretty decent outcome.
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