ECB cuts interest rates again in effort to tackle slowdown in EU's economy

The cost of borrowing has fallen across the 20-member euro area for the third time this year after the European Central Bank cut its main interest rate to 2.25% in response to slowing growth and Donald Trump's trade tariffs.

- Phillip Inman

The Frankfurt-based bank cut its benchmark deposit rate by a quarter of a percentage point yesterday, in line with economists' expectations, to tackle a slowdown in the bloc and the impact from the border taxes imposed this month on all EU imports into the US.

The ECB president, Christine Lagarde, said US tariffs on EU goods, which had increased from an average of 3% to 13%, were already harming the outlook for the European economy.

"The major escalation in global trade tensions and the associated uncertainty will likely lower euro area growth by dampening exports," she said, adding that they may "drag down investment and consumption".