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The European Central bank has announced its third interest rate cut of the year, citing well-controlled Inflation in the euro zone and a deteriorating economic outlook. This marks a shift in focus towards protecting economic growth rather than solely targeting Inflation, as the region’s growth has been lagging behind the United States. ECB President Christine Lagarde mentioned that the disinflationary process is on track and further rate cuts may be on the horizon unless economic data improves. However, uncertainties such as the U.S. elections and potential trade tariffs pose risks to the euro zone economy. The recent quarter-point rate cut brings the ECB’s deposit rate to 3.25%, with more cuts possibly to follow in the coming months. Inflation remains under control but economic growth has been weak for nearly two years, prompting calls for policy easing from ECB members and politicians alike. Lagarde emphasized the need for structural reforms to enhance productivity and competitiveness in the European economy.

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