David McNamara: The ECB walks an interest rate tightrope between growth and inflation

The market spotlight will be focused on the US Federal Reserve this week, as it is widely expected to cut rates for the first time this cycle

ECB president Christine Lagarde was purposely vague in her outlook. Picture: AP/Michael Probst

The ECB cut interest rates for a second time this year at the September policy meeting of its Governing Council, but a cautious trajectory for rate cuts in the coming months risks choking off an anaemic growth profile across the eurozone. 

The deposit rate was lowered by 25 basis point (bps) to 3.50% while the refinancing rate was cut by 60bps to 3.65%, which included the previously announced reduction in the spread between it and the deposit rate from 50bps to 15bps.