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Rate cut: The ECB has reduced its benchmark interest rate to 3.25%, increasing pressure on the Bank of England to act faster in the UK.
The European Central Bank (ECB) has cut interest rates for the third time this year.
The decision increases pressure on the Bank of England to act faster in the UK. The Frankfurt-based institution reduced its benchmark borrowing rate to 3.25 percent.
The ECB said inflation was increasingly under control – it had fallen sharply after a painful rebound following Covid lockdowns and the invasion of Ukraine – while the outlook for the moribund eurozone economy was worsening.
The German economy – the eurozone’s largest – is in crisis as its once-mighty industrial centers suffer from higher energy bills and subdued demand around the world.
The ECB is expected to cut rates further in the coming months.
The Bank of England approved its first UK rate cut in four years (reducing them from 5.25 to 5 percent) in August, but has held firm since then.
But now that inflation is below the 2 percent target (1.7 percent), it is expected to cut rates again in November and December, taking them to 4.5 percent by Christmas.
Analysts predict a series of further reductions next year.
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