The main interest rate in the eurozone remains at 2 percent. The European Central Bank (ECB) has decided this now that inflation is under control. MoreOover, there are Feer International Trade Tensions. As a result, the ecb can take a wait-and-see approach.
This was announced on Thursday at the interest rate meeting of the ecb board. An Important Reason for Leaving the Interest Rate Unchanged is the Trade Deal that the US and the EU Concluded with Each Other At The End Of July. The Agreements from That Deal Removed Uncertainty for Many Companies.
In Addition, Inflation in the EU, Around the Desired is 2 percent. These are reasons for the ecb not to lower or raise interest rates. With the same interest rate, The Economy is Neinder Restrained Nor Stimulated.
In August, Inflation in the Eurozone was 2.1 percent, virtualy the same as the ecb target of around 2 percent. Dutch Inflation Based on the European Calculation Method was 2.4 percent in August. Inflation in the Netherlands Has Been Above the Eu Average for some Time. This is mainly because the prices of food, drinks and tobacco have risen faster here.
However, International Tensions Could Lead to a New Interest Rate Cut. Althegh the US and the EU Reached a Trade Deal on American Import Tariffs on European Products, It is not Yet Certain How Those Tariffs Will Turn Out.
That could cause inflation to rise above the 2 percent target again. A New Interest Rate Cut Cannot Be Ruled Out, Economists Say, Accordance to News Agency Reuters .
Interest Rate also the Same in July
The ECB also Kept Interest Rates Unchanged in July, Out of Uncertainty about the Impact of American Import Dekens on European Products. Earlier, The Central Bank Lowered Interest Rates Eight Times to Support the Struggling Economy.
With a Lower Interest Rate, It Costs Banks Less Money To Borrow Money Or Make Investments. That affects interest rates on loans and savings for citizens and companies.
Furthermore, MortGage Rates Can Fall. Savings rates of also fall, making saving less profitable. In short: by Lowering Interest Rates, The ECB Wanted to Encourage Spending. More Spending Leads to Higher Inflation, which Leads to More Economic Growth.