The European Central Bank has followed the U.S. and Canada in cutting interest rates 50 basis points. “Following the terrorist attacks on the U.S., uncertainty about the U.S. and the world economy has increased. The Federal Open Market Committee has reacted by lowering its target for the federal funds rate today,” the ECB said in a prepared statement.

In concert with this decision, the Governing Council of the ECB decided to cut rates 50 bps to 3.75%.

“In the view of the Governing Council, the recent events in the US are likely to weigh adversely on confidence in the euro area, reducing the short-term outlook for domestic growth. As this is likely to further reduce inflationary risks in the euro area, a lowering of the ECB’s key interest rates is appropriate,” the banks said.

The Governing Council said it has confidence in the fundamental strength and resilience of the US economic system. Against the background of the sound fundamentals of the euro area, the Governing Council remains confident that the slowdown in economic growth will be short-lived.