FRANKFURT (Reuters) – European Central Bank (ECB) officials initially wanted a deeper cut in interest rates for Thursday’s meeting, amid concerns that new U.S. tariffs would hamper the bloc’s economic growth , three sources told Reuters.
The ECB on Thursday cut interest rates by 25 basis points for the fourth time since the start of the year and left the door open for further easing as economic growth is hit by political instability in the monetary bloc and the threat of a new trade war with the United States.
Some five of the 26 members of the ECB Governing Council, however, initially pushed for a 50 basis point reduction in view of inflation and economic growth forecasts.
They notably argued that growth in gross domestic product (GDP) could be lower than the ECB’s already revised downward forecasts for next year (+1.1% compared to +1.3% previously) if the future American administration of Donald Trump imposes new customs duties on the European Union.
The small minority of decision-makers within the Governing Council who demanded a deeper reduction, however, quickly relented, the sources said.
When asked, an ECB spokesperson declined to comment.
At a press conference, Christine Lagarde, the president of the ECB, assured that the reduction of 25 basis points had been unanimously supported and that the new economic projections of the institution’s experts did not take into account the impact of possible new customs duties.
(Reporting Francesco Canepa and Balazs Koranyi)
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