ECB lowers the interest for the fifth time in a row

This article was last updated on January 30, 2025

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ECB lowers the interest for the fifth time in a row

The European Central Bank (ECB) again reduces interest rates, from 3 to 2.75 percent. It is the fifth interest rate in a row and the first of this year.

The interest rate reached a highlight of 4 percent in 2023. The ECB had raised interest rates in fast steps before that time in order to curb the high inflation as a result of the high energy prices. A high interest rates makes borrowing money more expensive, which should cool the economy.

The aim is to reduce inflation in the eurozone to 2 percent. In December the average inflation amounted to 2.4 percent according to the European calculation. In the Netherlands, according to that calculation, inflation is a lot higher, namely 3.9 percent. Because inflation has been falling for some time, the ECB sees room to lower interest rates.

At a press conference, ECB president Lagarde, as is often the case, did not anticipate future interest rate decisions. Yesterday, the US Central Bank, the Fed, decided not to change the interest, after three interest letings last year. This brings the interest in the United States to 4.25 percent.