The European Central Bank cut its main interest rate by a quarter point on Thursday, citing rising trade tensions following U.S. President Donald Trump’s sweeping tariff campaign. The decision brings the rate down to 2.25 percent, marking the ECB’s seventh cut in the past year.
In a statement, the bank said eurozone economies had built some resilience against global shocks, but the outlook for growth had worsened. Trade friction, it said, was now a defining risk.
ECB President Christine Lagarde told reporters the effects were already visible. Business investment was slowing, she said, and consumers were growing cautious. “Disruptions to international commerce, financial market tensions and geopolitical uncertainty are weighing on business investment,” Lagarde said. “As consumers become more cautious about the future, they may pull back on spending.”
Trump’s tariff policy, announced on April 2, has sparked a broader trade war with retaliatory threats from Europe and Asia. Economists warn the fallout may ripple through global supply chains.
Yael Selfin, chief economist at KPMG, said trade disruptions could lead to a glut of manufactured goods and potential deflation. “The outfall of the trade disruptions could create a global glut of manufactured goods,” she said. “That could push prices into deflationary territory this year.”
While the ECB has moved to protect the eurozone economy, the U.S. Federal Reserve has taken a different approach. At its most recent policy meeting in March, the Fed held interest rates steady. Chair Jerome Powell signalled that uncertainty from Trump’s tariffs may keep rates unchanged for the foreseeable future.
Speaking in Chicago on Wednesday, Powell offered his strongest remarks yet. “These are very fundamental policy changes,” he said, warning that the tariffs could drag on growth.
Trump reacted swiftly. On social media, he criticised Powell’s decision to hold rates and called the Fed’s latest report a “complete mess.” He added, “Powell’s termination cannot come fast enough.”
Lagarde responded with calm defiance. “I have a lot of respect for my esteemed colleague and friend Jay Powell,” she said at her press conference. She also underscored the ECB’s independence, warning against political interference in monetary policy.
“For us, here, the independence of central banks is fundamental,” Lagarde said. “Any country that wants to join the eurozone must prove it can uphold that independence in law and in practice.”
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President Volodymyr Zelenskyy on Tuesday (24 February) urged Ukraine’s allies to maintain their backing as the war with Russia entered its fourth year, with divisions among European partners overshadowing anniversary commemorations.
Tourists from all over the world flock to Paris, France for elaborate Valentine’s Day proposals, with agencies reporting record bookings and luxury packages reaching up to €100,000.
Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, is a hardline cleric with strong backing from the Islamic Revolutionary Guard Corps. His rise signals continuity in Tehran's anti-Western policies.
Global oil prices surpassed $119 a barrel on Monday (9 March, 2026), an almost four year high, as the Middle East conflict rumbled on.
Trump says the United States "don’t need people that join wars after we’ve already won," targeting his criticism at UK Prime Minister Keir Starmer. Israel continues to fire missles at strategic sites in Iran and Gulf regions report more strikes from Iran.
China has urged Afghanistan and Pakistan to resolve their dispute through dialogue after Chinese envoy Yue Xiaoyong met Afghan Foreign Minister Amir Khan Muttaqi, as fighting between the two neighbours entered its eleventh day.
Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader on Monday (9 March), signaling that hardliners remain firmly in charge, as the week-old U.S.-Israeli war with Iran pushed oil above $100 a barrel.
Global financial markets remained on edge on Friday as the escalating war involving the United States, Israel and Iran continued to rattle investors, fuelling volatility in stocks and sending energy prices sharply higher.
China’s top leadership has unveiled a new push to turn advanced technologies into large-scale industrial priorities as part of the country’s upcoming 15th Five-Year Plan, which will guide economic and social development from 2026 to 2030.
The European Commission sees no immediate impact on the European Union's security of oil supply from the escalating conflict in the Middle East, it said in an email to EU governments, seen by Reuters on Monday (2 March).
Paramount Skydance emerged as the winner in a months-long battle to acquire Warner Bros Discovery after streaming giant Netflix on Thursday refused to raise its bid for the storied Hollywood studio.
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