The European Central Bank cut its key interest rate on Thursday to boost an economy that’s struggling to grow as consumers burned by inflation warily eye price tags and businesses try to navigate political turmoil in leading economies France and Germany.

The European Central Bank (ECB) cut its benchmark interest rate again by a quarter-point to 2.75% on Thursday as inflation nears 2% and growth remains weak.

Economists polled by Reuters had expected growth of 0.1% over the period, following a larger-than-expected 0.4% expansion in the third quarter.

After lowering key rates in December, the ECB is widely expected to announce another 25 basis points (bps) cut, taking the benchmark rate on deposit facility from 3% to 2.75%. It would be the fourth straight interest rates cut after trimming them in September, October and December 2024.

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 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.

The annual consumer inflation rate in the euro area for December was confirmed at 2.4 percent, marking its highest point since July, according to a r

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.

However, higher U.S. tariffs would likely slow that rebound, if not stall it completely. Economists at Berenberg Bank estimate that a 10% tariff on all U.S. imports from the eurozone would reduce the growth rate by as much as half of a percentage point within a year.

The ECB cut interest rates for the fifth straight time after figures showed the European economy unexpectedly stagnated at the end of 2024.