On Thursday, the European Central Bank reduced interest rates, for the fifth consecutive time, in the midst of slowing down the growth of the region’s economy.
The decision -makers lowered the key rate of the bank by a quarter of a point to 2.75%, inflation remained relatively close to their target of 2%. The measures come one day after the American federal reserve has held stable rates, as the economic prospects of the United States and Europe diverge.
“The disinflation process is on the right track,” the bank said in a statement, adding that there were signs that inflation would settle around the objective on a “sustained” basis.
Annual inflation in the euro zone was 2.4% in December, slightly higher than the previous month as energy prices increased.
The Central Bank decision -makers have different perspectives on the prospects of inflation. Some emphasize the signs of persistent inflationary pressures, such as prices growth in the service sector, which has stubbornly held around 4%. Others, including the chief economist of the bank, Philip R. Lane, said that if the borrowing costs remain too high for too long, inflation could drop too low.
The economy of the euro zone stagnated in the fourth quarter of last year, weakening after having increased by 0.4% during the previous quarter, according to data published Thursday.
The unexpected ground increases the pressure on central bank officials to reduce interest rates to help generate economic growth in a region that is disturbed by its decreasing competitiveness with the United States and China and is extremely vulnerable to commercial disturbances. The German economy, the largest in the block, has decreased for two years, because energy costs and high interest rates have weighed on businesses and consumers, and political uncertainty before the next month exacerbated the problem.
But the Central Bank officials said governments must facilitate cross -border businesses and investment and not count on monetary policy to stimulate economic growth.
The federal reserve held stable interest rates on Wednesday after the officials said they “move carefully” in the midst of persistent inflation risks and a strong labor market.
Last year, the Fed reduced the rates of a percentage point, such as the European Central Bank. For the future, the American central bank should not make many rate drops, despite President Trump who pushes them. Its policies, such as reducing immigration and the increase in import prices, could exacerbate inflationary pressures. Merchants expect the Central Bank of the euro area to reduce rates to most of its meetings in the first half of this year.
So far, Europe has not been at the center of Mr. Trump’s plans to increase prices. But an idea of how such a disruptive event would have come from Canada on Wednesday, where the central bank reduced interest rates and abandoned its directives on future political movements in the threat of the prices proposed by Mr. Tri From 25%, which could be imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed As being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as being imposed as the price of Mr. Trump, which could be imposed as being imposed because on Saturday.
