The European Central Bank confirmed analysts' and markets' forecasts by cutting interest rates for the third time and for the second consecutive time by 25 basis points against the backdrop of the rapid decline in inflation and the deterioration of the Eurozone economy.

This is the first back-to-back rate cut by the ECB in 13 years, with the key rate of the deposit-taking facility now at 3.25% from 3.5% previously.

Eurozone inflation fell to 1.7% in September, more than expected, the lowest level since 2021 and below the ECB's 2% target. Beyond inflation, however, what is more worrying is the less favourable outlook for the eurozone economy. Significantly, Germany's economy is expected to contract for a second consecutive year in 2024, according to government forecasts.