The European Central Bank cut its key interest rate on Thursday to boost an economy that’s struggling to grow as consumers burned by inflation warily eye price tags and businesses try to navigate political turmoil in leading economies France and Germany.

The European Central Bank (ECB) cut its benchmark interest rate again by a quarter-point to 2.75% on Thursday as inflation nears 2% and growth remains weak.

The eurozone economy stagnated in the fourth quarter as political instability weighed heavily on the region’s two biggest countries, offsetting better performance elsewhere.

Rising services prices were behind the boost in the December inflation figure, although they were offset by a fall in food, alcohol and tobacco prices. View on euronews

After lowering key rates in December, the ECB is widely expected to announce another 25 basis points (bps) cut, taking the benchmark rate on deposit facility from 3% to 2.75%. It would be the fourth straight interest rates cut after trimming them in September, October and December 2024.

The euro zone economy stagnated last quarter as worried consumers zipped up their purses, adding to fears that a long-predicted recovery could be further delayed, Eurostat data showed today.

The euro area annual consumer inflation rate for December was confirmed at 2.4%, its highest level since July, according to a second reading released Friday. Headline inflation accelerated from 2.2% in November, Eurostat data showed.

The bloc’s Gross Domestic Product ( GDP ) increased at an annual pace of 0.9% in Q4 versus 0.9% in Q3 and 1% expected. Separately, the Eurozone Unemployment Rate increased to 6.3% in December, compared to November’s 6.2%.

The annual consumer inflation rate in the euro area for December was confirmed at 2.4 percent, marking its highest point since July, according to a r

Economic growth in the eurozone slowed to a halt in the fourth quarter, dragged by contractions in two of its major economies, France and Germany,

Eurozone consumer price inflation hit an annual rate of 2.4% in December, new data shows, the same level as November and in line with economist expectations. Month-on-month inflation was at 0.4%, also in line with inflation and matching November levels.

Europe’s economy stagnated late last year as its former growth engine, Germany, finished a second straight year of shrinking output.