Inflation in Europe is falling, the European Central Bank is cutting interest rates further

This article was last updated on December 12, 2024

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Inflation in Europe is falling, the European Central Bank is cutting interest rates further

The European Central Bank cuts interest rates again, from 3.25 to 3 percent. It is the fourth time this year that interest rates have fallen. The central bank is doing this because price increases in the euro zone are coming under control.

Last year the ECB decided to raise interest rates to a record high of 4 percent. This was necessary due to high inflation due to increased energy prices to curb. High interest rates make it more expensive to borrow, which can cool the economy and put an end to price increases.

Inflation in the Netherlands remains much higher than in the rest of the eurozone. In November, inflation here was 3.8 percent, while the average in the euro zone is 2.4 percent. A lower ECB interest rate is favorable for the eurozone. For euro countries with high inflation, such as the Netherlands, the interest rate cut will be of less help.

Worries about the economy

Since June this year, the ECB has been cutting interest rates slightly because price increases continue to rise are further under control.