ECB Reduces Key Interest Rates Amid Trade Tensions

In a significant move, the European Central Bank (ECB), under the leadership of President Christine Lagarde, has decided to cut the three key interest rates by 25 basis points. This decision comes at a time when the threat of tariffs from the United States, under President Donald Trump, is casting a long shadow over the Eurozone's export and investment landscape.

Lagarde Calls for Enhanced EU Competitiveness

Lagarde emphasized the urgent need for the governments within the European Union to bolster the bloc's competitiveness. This, she believes, is crucial in de-escalating the current tensions and mitigating the adverse effects on exports and investment interests.

Inflation Outlook Revised Upwards

On a positive note, Lagarde highlighted that the disinflation process is progressing as planned, leading to a significant reduction in the restrictiveness of the ECB's monetary policy. The inflation outlook for 2025 has been revised upwards to 2.3%, a change attributed to stronger energy price dynamics.