FRANKFURT, Germany — With inflation subsiding, the European Central Bank cut its benchmark interest rate Thursday to prop up tepid growth with lower borrowing costs for companies and home buyers.
The bank’s rate-setting council lowered the deposit rate from 3.75 percent to 3.5 percent at a meeting at its skyscraper headquarters in Frankfurt.
It was the second rate cut as the bank starts to withdraw some of the swift rate increases it imposed to snuff out a burst of double-digit inflation that broke out after Russia cut off most natural gas supplies over its invasion of Ukraine.
Inflation is now down to 2.2 percent, close to the bank’s target of 2 percent, thanks in part to lower global prices, allowing the ECB to shift its focus to concerns about growth that has been held back by high rates.
The US Federal Reserve is also expected to cut rates from a 23-year high at its meeting on Sept. 17-18.