The European Central Bank cuts interest rates to 3.25% in the third cut this year

The European Central Bank (ECB) has cut interest rates for the third time this year.

The decision increases pressure on the Bank of England to act faster in Britain. The Frankfurt-based institution lowered its key interest rate to 3.25 percent.

The ECB said inflation was increasingly under control – having fallen sharply following a painful spike in the wake of Covid lockdowns and the invasion of Ukraine – as the outlook for the eurozone’s moribund economy worsened.

Germany’s economy – the largest in the eurozone – is in crisis as its once-mighty industrial heartlands suffer from higher energy bills and weak demand around the world.

The ECB is expected to cut interest rates further in the coming months.

The Bank of England approved Britain’s first four-year interest rate cut in August – from 5.25 percent to 5 percent – but has held steady since then.

But with inflation now below the 2 percent target from 1.7 percent, interest rates are expected to be cut again in November and December, taking rates to 4.5 percent by Christmas.

Analysts predict a series of further cuts next year.