The European Central Bank (ECB) will continue to cut interest rates next year now that inflation is slowing towards the 2 percent target. ECB President Christine Lagarde said this in a Monday speech at the Central Bank of Lithuania.
Last week, the ECB announced its fourth rate cut of the year to support the ailing eurozone economy.
“We are not there yet but close to achieving our objectives. If the incoming figures continue to confirm our baseline, then the direction of travel will be clear, and we expect to cut interest rates further,” Lagarde said in Vilnius.
The most important interest rate in the eurozone was cut again by a quarter of a percentage point last week. The central bank in Frankfurt will meet again on January 30; another rate cut of a quarter of a percentage point is expected.
Lower interest rates reduce the cost of credit for households and businesses, which may lead to increased spending and investment.
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