ECB Cuts Interest Rates as Growth Risks Escalate

European Central Bank (ECB) President Christine Lagarde has issued a stark warning about the increasing downside risks to economic growth in the eurozone. Speaking at a press conference following the ECB's decision to cut interest rates by 25 basis points, Lagarde cited global geopolitical tensions and weakening market dynamics as key concerns.

Geopolitical Tensions and Market Dynamics

Lagarde emphasized that the ongoing wars in Ukraine and the Middle East remain a "major source of uncertainty" for the eurozone economy. She also pointed to deteriorating market conditions as a significant drag on investment and consumption across the region.

Signs of Stabilization and Future Support

Despite these challenges, Lagarde noted some positive developments, including signs of stabilization in manufacturing activity after a prolonged downturn. She also highlighted that increased defence and infrastructure spending in several eurozone economies is expected to provide additional support to the economy.