European Central Bank Cuts Interest Rates as the Economy Weakens

The European Central Bank lowered interest rates on Thursday, the fourth cut this year amid growing concerns that the region’s economic outlook is darkening.Policymakers reduced the bank’s deposit rate by a quarter point, to 3 percent, in a move widely expected by investors.The bank, which sets rates for the 20 countries that use the euro, has been lowering rates since June as inflation slowed toward its target to 2 percent.

In November, inflation averaged 2.3 percent across the region, slightly higher than in previous months as energy prices rose.“The disinflation process is well on track,” the bank said in a statement on Thursday.Despite substantial progress on reining in inflation in recent years, other risks are accumulating.Europe faces the prospect of higher tariffs on its goods exported to the United States imposed during the second term of President-elect Donald J.

Trump, and political turmoil in Germany and France, the bloc’s two largest economies, is adding to the uncertainty.Much of the past year has been spent warning that Europe needs to take drastic action to improve its competitiveness, but it is not clear where the leadership will come from to make the necessary changes.

That increases the pressure on the central bank to support the economy with lower interest rates.As inflation has slowed in Europe and the United States, central bankers have eased their monetary policy stances.But in recent months, there are growing distinctions between the banks over how fast and how much they need to lower rates.Earlier on Thursday, the Swiss National Bank cut rates by a larger-than-expected half-point as its currency, considered a haven during times of geopolitical stress, has strengthened.

Next week, the Federal Reserve is expected to cut rates after inflation data published on Wednesday added to confidence of slowing price growth.And the Bank of England is expected to hold rates next week, continuing its gradual approach to easing amid concerns t...