European Central Bank make fourth rate cut of the year [Video]

The European Central Bank has announced its fourth interest rate cut this year, signaling that further easing is possible as inflation nears its target while the economy remains sluggish.

The ECB, which serves the 20 countries that use the euro, lowered the rate it pays on bank deposits—the key factor influencing financing conditions in the eurozone—from 3.25% to 3%.

This is down from a peak of 4% in June.

The central bank also indicated the potential for additional rate cuts by removing a reference to keeping rates “sufficiently restrictive,” a term used to describe borrowing costs high enough to limit economic growth.

“Financing conditions are easing as the recent rate cuts by the Governing Council gradually lower borrowing costs for businesses and households,” the ECB stated.

“However, conditions remain tight because monetary policy is still restrictive, and the effects of previous rate hikes continue to impact the existing stock of credit,” it added.

Commenting on the latest rate cut, Professor Joe …