The European Central Bank cut interest rates today by 25 basis points, the second cut of that size in consecutive months.
It brought the deposit facility rate down to 3.5% for the first time since April 2023.
Policymakers made the decision following a steady fall in inflation across the bloc, which was "broadly as expected" it said in a statement.
At the latest reading in August, eurozone inflation fell to 2.2%, just 20 basis points above the ECB’s long-term target of a flat 2%.
A sharp decline in energy costs has been the primary driver behind the decline in annual inflation, although this has been offset by the rising cost of services, food, alcohol and tobacco.
The latest ECB staff projections are for headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026, unchanged from June's forecasts.
For core inflation, which excludes energy and food prices. the projections for 2024 and 2025 have been revised up slightly, as services inflation has been higher than expected, though a decline in core inflation is still expected from 2.9% this year to 2.3% in 2025 and 2.0% in 2026.