The European Central Bank has reduced the interest rate from 3.25% to 3%. This marks the fourth rate cut this year as inflation in the eurozone is being controlled.
Last year, the ECB raised the rate to a record 4% to tackle high inflation driven by increased energy costs. A high interest rate makes borrowing more expensive, cooling the economy and curbing price increases.
In the Netherlands, inflation remains significantly higher than the eurozone average. In November, Dutch inflation was 3.8%, compared to the eurozone average of 2.4%.
While the lower ECB rate is beneficial for the eurozone, it is less effective for countries like the Netherlands with high inflation. Concerns persist over the European economy, with challenges facing the manufacturing sector as automakers plan to close factories and lay off thousands.
Europe also faces increasing competition from American and Chinese products.
Source: NOS