The ECB’s New Move: Rates and Economy in Focus

Imagine you are in charge of Europe's finances. You have to decide whether to cut interest rates. If the cut is, then you are trying to get the economy going again as it is currently growing slowly. That's the picture in Europe. Recently the ECB cut the deposit facility rate to 2. 75%. Economists were expecting that to happen. The ECB is trying to keep prices for goods and services stable. However, price increases in the past three months grew higher than two percent. Did those increases happen? Some people say energy costs are the reason. Energy costs went down. People are now shopping more for necessities.

How did the economy do recently? The European economy didn't grow from the last three months of last year. This did not go as planned. Those three months were expected to grow by 0. 1%. The central bank head said the economy remains weak. The economy is expected to get better but because of that its needing to upgrade its rate. Then there's an ocean away from the USA. The USA didn't cut rates but the ECB did. The ECB has more room to cut rates. This is because the USA is better at raising rates.

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