Mark Veldon, UK Country Co-Leader and Co-Leader of EMEA Private Equity at AlixPartners, comments on the European Central Bank’s (ECB) rate decision:

"With the ECB lowering rates by another 25 basis points to 3.25%, this marks the third reduction this year - a gradual and deliberate easing that fits the ECB's broader strategy to bring rates down carefully without destabilising markets. The prospect of lower inflation has also increased the chances of a quicker rate-cutting cycle, rates potentially coming down to 3% by year-end.

“Although cheaper borrowing presents a golden opportunity for investors, caution is still warranted. Core inflation remains sticky, and the wider economic landscape is not yet stable. Germany, for instance, is expected to recover slightly this month, but its economy continues to grapple with slow growth. Ongoing uncertainty around globally supply chains and energy markets has further complicated the picture, too, and investors will need to weigh the benefits of improved financing conditions against the potential risks. 

“While today’s decision will give private equity activity across the Eurozone another boost, ultimately, we’re still in a very fragile economic climate. For investors, it's crucial to prioritise long-term resilience over short-term gains in this environment.”