FRANKFURT (Reuters) – The European Central Bank cut interest rates for the fourth time this year on Thursday and kept the door open to further easing in 2025 as growth takes a hit from political instability at home and the risk of a fresh trade war with the United States.
Following are highlights of ECB President Christine Lagarde’s comments at a news conference after the policy meeting.
TRADE RISKS
“The risk of greater friction in global trade could weigh on euro area growth by dampening exports and weakening the global economy.”
ON INFLATION
“We expect inflation to fluctuate around its current level in the near term, as previous sharp falls in energy prices continue to drop out of the annual rates. It should then settle sustainably at around the 2% medium target.”
GROWTH RISKS
“The risks to economic growth remain tilted to the downside.”
UNDERLYING INFLATION
“Underlying inflation is overall developing in line with a sustained return of inflation to target.”
TRADE TENSIONS
“More affordable credit should boost consumption, providing trade tensions do not escalate.”
ECONOMY TO STRENGTHEN
“The economy should strengthen over time, although more slowly than previously expected.”
NOT COMMITTING TO A RATE PATH
“We are determined to ensure that inflation stabilizes sustainably at our 2% medium term target. We will follow a data dependent and meeting by meeting approach to determining the appropriate monetary policy stance.
“In particular our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
“We are not committing to a particular rate path.”
MOMENTUM
“(Growth) is losing momentum.”
(Reuters global news desk)
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