An interest rate cut was expected and it happened. The Governing Council of the European Central Bank (ECB) highlighted on Thursday the lowering of benchmark interest rates at 25 basis points (0.25%) and placing the main indicator at a 4%. Thus, the organization led by Christine Lagardand was maintained for second time the change in monetary policy initiated in June with the first rate cut since 2015.
This also coincides with the fact that this Thursday’s ECB meeting was the first with José Luis Escriva as governor of the Bank of Spain.
Thus, the organization led by Christine Lagarde announced this Thursday that the interest rate on main financing operations and the interest rates on the marginal credit facility and the deposit facility will be reduced to 4%, x% and x%, respectively. This change will take effect from 16 September, the ECB said.
The rate cut is driven by the fall in inflationThe inflation rate in the eurozone stood at August at 2.2% over one yearfour tenths below the 2.6% price increase observed in July. Precisely this Thursday, the Spanish economy reduced its interannual inflation rate by August up to 2.3%.
The markets were waiting for this decision and, as usual, they got ahead of the curve, as happened at the beginning of the week when the Euribor, the main reference indicator for mortgage loans, fell below 3% for the first time from December 2022.
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