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ECB Cuts Key Interest Rates: What You Need to Know
2024-09-11 17:55:09
Economy
Finance
Markets

ECB Cuts Key Interest Rates: What You Need to Know

The European Central Bank (ECB) has decided to lower key interest rates by 0.25 percentage points. The deposit rate now stands at 3.5% and the key rate at 4.1%, narrowing the gap between the two to 0.15 percent.

Inflation in the euro area is approaching the 2% target after a wave of inflation, but core inflation remains stubborn. The ECB has presented new forecasts for inflation and growth.

However, the Bundesbank has warned against too rapid easing. As a result of the rate cut, mortgage rates have dropped and property prices have increased by 2%, making it a good time for potential buyers to make a purchase.

Savings account interest rates have also decreased and are expected to continue falling. This could lead to financial relief for borrowers.

Some predictions suggest that interest rates will remain stable in 2025, while others anticipate further cuts. The ECB's decision to end its zero and negative interest rate policy in 2022 has led to the highest levels of key and deposit rates since the establishment of the monetary union.

Investors should prepare for declining yields on fixed-income investments.

Related news on that topic:

Central Banks Prepare for Interest Rate Cuts in Response to ... Weakening Economies

As the US economy shows signs of weakness, the Fed and ECB are considering interest rate cuts in September. The ECB is expected to make additional cuts in December. Powell, Ueda, and Lagarde are among the central bankers discussing these moves. The recent jobs report, with fewer-than-expected new jobs in August, adds to the case for larger Fed rate cuts. Market experts are closely watching Bitcoin's fate, anticipating the impact of the Fed's decisions on its price amidst economic uncertainties and market tensions. The CME Fed Watch tool indicates high probabilities of rate cuts, with traders predicting a 0.25 or 0.50-basis point cut. The Fed's policy decision is scheduled for September 18.

Inflation rate in Germany falls to lowest level in three years

In August, Germany's annual inflation rate dropped to 2%, marking the lowest level since March 2021. Food prices, however, increased by 1.5% compared to August 2023. The European Central Bank is expected to further lower interest rates as inflation is no longer a pressing concern. While energy prices decreased, other areas such as services and rents became more expensive. The core inflation rate, excluding energy and food, decreased to 2.8%. Experts anticipate interest rate cuts, but see no price stability or growth driven by private consumption yet. Despite the decrease in inflation, there are concerns about the lack of price stability, prompting speculation about a potential interest rate cut by the European Central Bank. Inflation in Germany fell below the 2% mark in August, with energy prices being 5.1% cheaper, while services became 3.9% more expensive. While the inflation rate is below the target set by the European Central Bank, there are still price increases in some sectors, including food and services. The decline in energy prices played a significant role in lowering the overall inflation rate, but prices for goods and services continued to rise.

Read 19 more recent news on this topic

The press radar on this topic:

n-tv.de
11. September 2024 um 09:59

The rally downwards has begun: Secure high fixed deposit interest rates now - n-tv.de

Economy
Finance
The rally downwards has begun Secure high fixed deposit interest rates now When interest rates fall, investors first feel it in their daily accounts. Those who want to secure good returns in the medium to long term should therefore consider fixed-term deposits. Max Herbst from FMH-Finanzberatung explains what to watch out for. To counter the record inflation in the euro area, the European Central Bank (ECB) has been turning the interest rate screw almost regularly since mid-2022. Now that these..
morgenpost
11. September 2024 um 11:30

Current credit interest rates: ING adjusts mortgage rates

Finance
Economy
The direct bank ING has lowered its mortgage interest rates. Also, Bank of Scotland has adjusted its credit interest rates for consumers. In addition, there is a new KfW subsidy called "Young buys Old" and American Express is launching new credit card campaigns. Furthermore, there are changes to the Priority Pass and alternatives to credit cards with annual fees.
EL PAÍS
11. September 2024 um 12:42

Mortgage War in Sight: Experts Anticipate Discounts After New ECB Rate Cut

Finance
Economy
Banks are adjusting their offerings from mid-September with Euribor below 3%. Fixed-rate mortgages are concentrated in the 4% APR range, which can drop to 3.2% if the customer receives bonuses (usually banks lower the price if the payroll, several household bills, a credit card, several insurance policies, and a subscription to pension plans or investment funds are domiciled). In this sense, Santander offers 3.22%, Openbank 3.27%, Bankinter 3.57% or Cajamar 3.74%. This is the most desired prod..
focus
11. September 2024 um 12:12

Implications for Your Money - Will the ECB Lower Rates Again Tomorrow, Requiring Borrowers and Savers to Rethink Their Plans

Finance
Economy
The ECB is expected to lower the key interest rate, which will make loans cheaper but also reduce savings rates. Overdraft interest rates could also decline. Experts expect the key interest rate to fall to around 3.25% by the end of 2024 if inflation in the eurozone continues to decline and the economy only recovers slowly. This is good news for borrowers, but less so for savers.
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