ECB Says Rate Cut Is Consistent With Low Inflation in Euro Area

The European Central Bank said low inflation in the 17-nation euro area allowed policy makers to cut interest rates last week, as economists lowered forecasts for consumer prices and economic growth.

The decision was “consistent with low underlying price pressure over the medium term,” the Frankfurt-based ECB said in its monthly bulletin today, echoing President Mario Draghi’s May 2 policy statement. Inflation expectations are “firmly anchored” and lower borrowing costs “should contribute to support prospects for a recovery later in the year,” it said.