The European Central Bank is cutting its key interest rate, a step to boost an economy that’s struggling to grow as consumers burned by inflation warily eye price tags and businesses try to chart a course amid political turmoil in leading economies France and Germany.

Europe’s economy stagnated at the end of last year as former growth engine Germany floundered to the end of a second straight year of shrinking output, officials said Thursday. Gross domestic product was flat with a zero increase in the final quarter of 2024 in the 20-nation eurozone,

Investors are snapping up crude oil futures as a hedge against the risk that U.S. President Donald Trump's threatened trade tariffs will cause a resurgence in global inflation, adding momentum to a recent rally in oil prices sparked by a tightening of sanctions on Russia.

The eurozone economy stagnated in the fourth quarter as political instability weighed heavily on the region’s two biggest countries, offsetting better performance elsewhere.

Rising services prices were behind the boost in the December inflation figure, although they were offset by a fall in food, alcohol and tobacco prices. View on euronews

Against this backdrop, the ECB’s communication in the policy statement and President Lagarde’s comments will hold the key to determining the scope and timing of the next rate cuts as the Bank battles concerns over economic growth and potential tariffs by United States (US) President Donald Trump’s administration.

Eurozone consumer price inflation hit an annual rate of 2.4% in December, new data shows, the same level as November and in line with economist expectations. Month-on-month inflation was at 0.4%, also in line with inflation and matching November levels.

The bloc’s Gross Domestic Product ( GDP ) increased at an annual pace of 0.9% in Q4 versus 0.9% in Q3 and 1% expected. Separately, the Eurozone Unemployment Rate increased to 6.3% in December, compared to November’s 6.2%.

The euro zone economy stagnated last quarter as worried consumers zipped up their purses, adding to fears that a long-predicted recovery could be further delayed, Eurostat data showed today.

The euro area annual consumer inflation rate for December was confirmed at 2.4%, its highest level since July, according to a second reading released Friday. Headline inflation accelerated from 2.2% in November, Eurostat data showed.

Europe’s economy stagnated late last year as its former growth engine, Germany, finished a second straight year of shrinking output

The ECB's deposit rate was cut to 2.75% from 3%, the lowest in nearly two years. It was the fifth cut by the ECB in its last six meetings, and came after the Federal Reserve on Wednesday stood pat on rates and signaled it was in no hurry to deliver further cuts.