ECB cuts interest rates – London Business News | London Wallet

The European Central Bank (ECB) has cut interest rates for the eighth time in a year by a quarter of a percentage point.

The bank is attempting to support the euro economy following the US President’s trade war.

The ECB’s governing council said, “In particular, the decision to lower the deposit facility rate – the rate through which the governing council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.”

ECB policymaker Robert Holzmann said that “the ECB should pause further interest rate cuts until at least September,” whilst board member Isabel Schnabel said there is “new shocks posing new challenges.”

Anatoli Annenkov, Societe Generale economist, said, “Reasons for the ECB to be cautious moving forward relate both to the need for more information on the trade war, and retaliatory measures in particular, and on German fiscal easing.

This comes as Donald Trump threatened last month to impose 50% of tariffs on EU goods which was “very difficult to deal with” for trade.

Maroš Šefčovič, the EU’s trade commissioner said during the Brussels Economic Security Forum on Thursday they believe a deal can be done between the bloc and Washington.

He said, “Our global chain especially [is] so intertwined that any obstacle in the middle of the Atlantic would simply make [industries] less competitive and more vulnerable from the perspective of economic security.”

Šefčovič added, “I am an eternal optimist, and I think we’ve been having our ups and downs… And therefore I think that here [we should] focus on the results, to be patient and to simply have a strategy.

“In the end, we are absolutely convinced that two of the biggest economies, representing 30% of the global trade… [it’s] much better if you can find solutions.”