The European Central Bank should follow the Swiss National Bank’s lead and consider cutting rates, as inflation in the euro zone is slowing down, but the economy is still struggling. Recent data shows a decrease in German consumer prices and an expected further slowdown in the euro zone, indicating that inflation is under control. However, policymakers who have hinted at cutting borrowing costs in June should make a move sooner, perhaps with a 25 basis-point reduction in official interest rates at the upcoming Thursday meeting.
Delaying a rate cut now could mean waiting for a long time while economic conditions worsen. With evidence pointing towards slowing inflation and a struggling economy, it may be wise for the European Central Bank to act sooner rather than later to provide support. Cutting rates could stimulate growth and help stabilize the currency market, which would ultimately benefit both consumers and businesses alike.
