Frankfurt (Germany) (AFP) - The European Central Bank cut interest rates again Thursday, upping the tempo at which it is lowering borrowing costs as inflation in the eurozone cools faster than expected and the economy loses steam.

The Frankfurt-based institution reduced rates by a quarter point, following a cut of the same size at its last meeting in September.

Thursday’s move was the first time that the ECB has cut rates at two successive meetings since it started the process of lowering borrowing costs in response to declining inflation.

From its peak of four percent, the ECB has lowered rates three times since June, leaving its benchmark deposit facility at 3.25 percent following the latest cut.

The decision came after a late downwards revision to September’s inflation data in the eurozone on Thursday.

Consumer prices in the bloc rose by 1.7 percent year on year in September, according to the EU’s data agency Eurostat, 0.1 percentage points less than the initial estimate.

Before the change, September’s reading was already the first time in three years that inflation in the eurozone had dipped below the ECB’s two-percent target.

The ECB had not achieved “complete victory” over inflation but declining price pressures were a positive sign, President Christine Lagarde said at a press conference.

“Have we broken the neck of inflation? Not yet. Are we in the process of breaking that neck? Yes,” Lagarde said.

- Slovenia meeting -

ECB rate-setters met in Slovenia to examine the current situation and make their decision, as they made one of their regular tours away from the institution’s headquarters in Germany.

The ECB cranked rates up higher and faster than ever before in response to soaring inflation in the wake of the coronavirus pandemic and the Russian invasion of Ukraine.

But recent, lower-than-expected inflation figures have added to the sense among policymakers that consumer prices are coming back under control.

The incoming data showed that the process of cooling consumer prices was “on track”, the ECB said in a statement.

Inflation was expected to rise again in the coming months “before declining to target in the course of next year,” the ECB said.

According to Lagarde, the information received by ECB rate-setters since their last meeting was “all heading in the same direction: downwards”.

This was true for inflation, but also for indicators of business confidence, Lagarde said.

The risks to growth “remain tilted to the downside” between feeble business morale and conflicts in Ukraine and the Middle East, Lagarde said.

The ECB had turned “much more concerned about the eurozone’s growth outlook” and the risk of “inflation undershooting the target”, ING analyst Carsten Brzeski said.

- ‘More data’ -

Thursday’s cut could represent a “pivot point”, Deutsche Bank Research analyst Mark Wall said

“The ECB has accelerated the easing cycle with the back-to-back cut” and normalising rates to take the brake off the economy, Wall said.

Lagarde refused to give an indication of what the thinking was among rate-setters ahead of the ECB’s next meeting.

“We will be receiving more data” to look at before December, when the ECB will also publish updated economic forecasts, Lagarde said.

Policymakers would “continue to follow a… meeting-by-meeting approach”, the ECB said, adding that it would not be “pre-committing to a particular rate path”.

In September ECB policymakers had given the impression that December would be the appropriate time for the next cut, sticking to one cut per quarter.

But Thursday’s move suggested the ECB had moved “from rate cuts tied to new macro projections every quarter to considering them at every meeting”, Brzeski said.

“It looks like they’re aiming to bring interest rates to neutral levels as quickly as possible,” he said.