How falling interest rates affect families, investors and companies

The European Central Bank (ECB) has reduced interest rates by 25 basis points to 3.25%. This is the third interest rate cut made by the agency so far this year. Thus, the peak financing costs reached in September 2023, at 4%, is still far away. What are the implications of this movement for the real economy?

1. What is meant by a decrease in interest rates?

He money has a price marked by interest rate paid to receive a loan. This is one of the mechanisms that central banks must employ to encourage or stop such increases