European Central Bank cuts key rate to lowest level in 3 years – National [Video]

The European Central Bank, which sets interest rates for the 20 countries that use the euro currency, cut borrowing costs once again on Thursday after figures showed inflation across the bloc falling to its lowest level in more than three years and economic growth waning.

The bank’s rate-setting council lowered its benchmark rate from 3.5% to 3.25% at a meeting in Llubljana, Slovenia, rather than its usual Frankfurt, Germany, headquarters.

The rate cut is its third since June and shows optimism among rate-setters over the path of inflation. Inflation sank to 1.8% in September, the first time in three years that it has been below the ECB’s target rate of 2%.

In a statement accompanying the decision, the ECB said recent economic evidence shows that “the disinflationary process is well on track.” However, it predicted an inflation pick-up in the coming months, before a return to its target in the course of next year.