Frankfurt, Germany – The European Central Bank has reduced interest rates for the seventh time on Thursday to fight against the economic growth driven by President Donald Trump’s tariff attack.
The bank said in a statement that “the outlook for growth has worsened due to increasing trade tensions.”
It quotes “exceptional uncertainty” about the economic situation of the future that the decisions of the future rates will be taken at a meeting on the basis of the meeting.
The bank’s move should support economic activities in 20 countries that use Euro coins to make credit more affordable for consumer and business.
At a meeting in Frankfurt, a bank-resistant council, the bank decided to reduce its benchmark rate to a fourth percentage point by 2.25%. From 2022 to 2021, the bank is steadily increasing after the bank has sharply extended to fight the outbreak of inflation.
Now the inflation that has declined, the concerns of growth have taken the center of the center. In the last three months of 2021, the economy has increased by a modest 0.2% in 20 countries that have used Euro. In March, inflation was 2.2%, close to 2% of the bank target.
This cut was widely expected by analysts of the Eurozone’s growth by the announcement of Trump’s unexpected high tariff or import tax on April 2, and the cut was widely expected by analysts, starting from 10% on other countries’ products and higher than 49%. European Union faces 20% of the tariffs.
At the last meeting of the March e on the March e, ECB’s President Christine Legard increased the chances of an upcoming “break” in the series of bank rate decreasing in Legard. However, the option was virtually eliminated by Trump’s announcement.
The bank’s benchmark rates throughout the whole economy. Low interest rates make orrow and buy products from home to new factory equipment makes it less expensive. It supports spending, business investment and appointment.
Trump has postponed tariffs for 90 days, but economists and policy makers are concerned that the higher expenses that he has proposed for Europe for Europe will depend on business activities – and if he carries it, it causes slow growth or even recession. The US largest trade partner in the United States that crosses the Atlantic on both sides of the goods and services of about 4.4 billion euros ($ 5 billion).
As the European Commission says, “Trans-Atlantic trade relationship is the most important commercial relationship in the world.”
Uncertainty is another reason that can slow down the economy as Trump’s breakfast breaks it out where the tariff rate is actually settled. If traders do not know what will be their expenses, they can stop deciding.
Economists of Berenberg Bank believe that some tariffs will be discussed through the Middle Ages, ending about 12%. However, it is about 10 percent higher than the average tariff before Trump. On top of this, 25% tariffs from all countries to autos, which will strictly hit Europe’s auto industry.
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