The European Central Bank (ECB) has lowered the interest rate from 3 to 2.75 percent, marking the fifth consecutive rate cut and the first of this year. The interest rate peaked at 4 percent in 2023.
Prior to this, the ECB had rapidly increased rates to combat high inflation driven by elevated energy prices. Higher rates make borrowing more expensive, which is intended to cool the economy.
The ECB aims to bring inflation in the eurozone down to 2 percent. In December, average inflation was 2.4 percent according to European calculations.
In the Netherlands, inflation was notably higher at 3.9 percent. With inflation declining for some time, the ECB sees an opportunity to gradually reduce interest rates.
Source: NOS