ECB cuts interest rates to 2% in effort to bolster flagging eurozone growth
The European Central Bank has cut interest rates to 2% in an effort to boost flagging economic growth across the eurozone.The ECB, making its eighth quarter-point cut in a year, said the 20-member currency bloc needed a reduction in the cost of borrowing as it reeled from the damage caused by Donald Trump’s trade wars.Economic growth has slowed across the eurozone and especially in France, Germany and Italy, while the outlook for next year is weak, according to forecasts by the EU.The move cuts the cost of borrowing to less than half the level in the UK, where the Bank of England last month cut interest rates to 4.25%, and the level set in the US by the Federal Reserve of between 4.
25% and 4.5%.The US president has railed against the Fed’s chair, Jerome Powell, and what he describes as its policy of maintaining high interest rates.On Tuesday, Trump noted the repeated interest rate cuts in Europe, and said: “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE.He is unbelievable!!!” in a reference to weak private sector payroll numbers given by the US data provider Automatic Data Processing.
The ECB cut its main deposit rate from 2.25% to 2% after inflation across the eurozone fell to 1.9% last month, below the central bank’s 2% target, for the first time since last September.The ECB said US tariffs would hit growth, but extra government spending on defence would fill some of the gap.“While the uncertainty surrounding trade policies is expected to weigh on business investment and exports, especially in the short term, rising government investment in defence and infrastructure will increasingly support growth over the medium term,” it said.
However, the ECB’s president, Christine Lagarde, said: “A strong labour market, rising real incomes, robust private sector balance sheets and easier financing conditions … should all help consumers and firms withstand the fallout from a volatile global environment,”She added: “Are we confident [about the outlook]? I think that would be a bit far-fetched,But we are well-positioned at the moment,”Lagarde said the vote to cut rates was “virtually unanimous”, after only one member of the governing council voted to keep rates on hold,The ECB president said it was difficult to know whether interest rates would need to fall further during a period of “significant uncertainty” in the global economy.
Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionShe warned that while manufacturing had strengthened, according to recent data, the domestically focused services sector was slowing.Mark Wall, Deutsche Bank’s chief European economist, said the central bank might make further cuts if the trade war hurt eurozone exporters more than expected.“The trade war is inherently unpredictable.The inflation undershoot could deepen and persist,” he said.Inflation in the eurozone is forecast to fall to 1.
6% next year before rising to 2% in 2026, largely as a result of fluctuations in energy and food prices.Irene Lauro, a eurozone economist at the asset manager Schroders, said the stable outlook meant “the ECB can afford to shift from urgency to patience”.Lagarde’s role as ECB president has come under the spotlight since the ousted head of the World Economic Forum, Klaus Schwab, said she had been involved in discussions to replace him.Lagarde, whose eight-year term is due to end in October 2027, dismissed concerns that she was poised to quit her job, saying she was committed to seeing out her tenure as president, adding: “You are not about to see the back of me.”
‘Stress crisis’ in UK as 5m struggle with financial, health and housing insecurity
More than 5 million UK adults are experiencing a triple whammy of financial, health and housing insecurity as British households hit levels of “multi-stress” not seen since the global economic crash well over a decade ago, research shows.One in 10 working-age adults are juggling low income and debt, insecure tenancies and high rents, and problems accessing NHS care. They are at least twice as likely as the rest of the population to report mental stress, sleeplessness and isolation.Researchers said the explosion in multiple insecurity amounted to a “national stress crisis”, with those affected experiencing heightened volatility and uncertainty in their lives and profound feelings of powerlessness and lack of control.The analysis highlights the rise in the number of people experiencing a combination of three separate categories of insecurity to map the extent to which people have the capacity to enjoy a good quality of life, materially and psychologically
Less than 4% of exploited care workers helped by UK government scheme
Less than 4% of exploited care workers have reported finding new work in a multimillion-pound government scheme designed to rematch them with new employers.Analysis by the Work Rights Centre found just 3.4% of the 28,000 exploited migrant care workers signposted to a service to find them new jobs had reported being rematched with a new employer, while 131,000 social care vacancies remain unfilled.Dr Dora-Olivia Vicol, chief executive of the charity, said: “After Covid, England desperately needed more care workers, and thousands of people from around the world answered that call in good faith.“But instead of jobs they got scams, and instead of justice they got a referral to a programme that simply doesn’t work as intended
Weight loss drugs linked to higher risk of eye damage in diabetic patients
Weight loss drugs could at least double the risk of diabetic patients developing age-related macular degeneration, a large-scale study has found.Originally developed for diabetes patients, glucagon-like peptide-1 receptor agonist (GLP-1 RA) medicines have transformed how obesity is treated and there is growing evidence of wider health benefits. They help reduce blood sugar levels, slow digestion and reduce appetite.But a study by Canadian scientists published in Jama Ophthalmology has found that after six months of use GLP-1 RAs are associated with double the risk of older people with diabetes developing neovascular age-related macular degeneration compared with similar patients not taking the drugs.Academics at the University of Toronto examined medical data for more than 1 million Ontario residents with a diagnosis of diabetes and identified 46,334 patients with an average age of 66 who were prescribed GLP-1 RAs
Housing bosses press Rachel Reeves to unlock more funds for affordable homes
Housing bosses representing 1.5m social homes across England will press Rachel Reeves to reclassify affordable housing as critical infrastructure spending, amid a battle between the chancellor and Angela Rayner.There is deep dissatisfaction with the level of funding for social homes in the spending review due next week. Rayner, the housing secretary, is one of the last remaining holdouts in negotiations with the Treasury over departmental spending settlements.The Department for Housing, Communities and Local Government has been battling for more funding for the affordable homes programme as well as trying to preserve cash for local councils, homelessness and regional growth initiatives
Millions in west do not know they have aggressive fatty liver disease, study says
More than 15 million people in the US, UK, Germany and France do not know they have the most aggressive form of fatty liver disease, according to research.Metabolic dysfunction-associated steatotic liver disease (MASLD) – the formal name for non-alcoholic fatty liver disease – occurs in people who drink no or minimal amounts of alcohol whose liver contains more than 5% fat.About two-thirds of patients with type 2 diabetes are thought to have the condition, which is also associated with obesity, heart and circulatory disease.Approximately 5% of adults globally have the most aggressive form of MASLD. Metabolic dysfunction-associated steatohepatitis (MASH) causes fibrosis (scarring) and can lead to cirrhosis and is linked to greater risk of cardiovascular disease, chronic kidney disease and liver cancer
I thought it was being gay that made my life so difficult. Then, at 50, I got an eye-opening diagnosis …
I spent far too many years lonely and angry, thanks to schoolmates who called me ‘weird’ and bosses who dismissed me as ‘hysterical’. But was it my sexuality that put their backs up – or the autism I am still coming to terms with?My earliest memory is of feeling different. I’m gay, and grew up in the 1980s, in a tough, working-class town in the north of England at the height of the Aids crisis. My gayness was obvious in the way I walked and talked. I was bullied at school, called a “poof”, “pansy” and “fairy”; other children did impressions of me with their wrists limp
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