Reuters
- The European Union just made its first cut to interest rates in five years.
- The European Central Bank lowered its main interest rate from 4% to 3.75%.
- Officials tend to lower interest rates when inflation is under control and they want to lift growth.
The European Union has become the latest global economy to cut its benchmark interest rate.
The European Central Bank announced on Thursday that it would lower its main interest rate from 4% to 3.75%, marking its first reduction since 2019. Canada cut its key policy rate from 5% to 4.75% on Wednesday.
Neil Birrell, the chief investment officer at Premier Miton Investors, said in a research note to clients: