The European Central Bank is likely to continue to lower its key interest rate as the threat of U.S. tariffs clouds already weak growth prospects, President Christine Lagarde said on Monday, the Wall Street Journal reported. Policymakers at the eurozone’s central bank lowered the key rate for their third straight meeting Thursday. In a speech in Lithuania, Lagarde said further cuts are on the way. “The direction of travel is clear and we expect to lower interest rates further,” she said.

Germany's economic downturn eased slightly in December but business activity still contracted for a sixth month running, according to a survey published on Monday, Reuters reported. The HCOB German flash composite Purchasing Managers' Index, compiled by S&P Global, rose to 47.8 from 47.2 in November, but remained in contraction territory. Analysts polled by Reuters had forecast a reading of 47.8. The business activity index for Germany's services sector rose to 51.0 in December from 49.3 in November, beating the forecast of 49.4. Any reading above 50 indicates expansion.

Private-sector business activity in France shrank for a fourth month as the fall of the government over a budget dispute sapped confidence, Bloomberg News reported. S&P Global’s Composite Purchasing Managers Index came in at 46.7 in December, staying below the 50 threshold separating expansion from contraction. Still, it’s an improvement from last month and also a bit better than the median estimate among analysts in a Bloomberg survey. Manufacturing and services also stayed in contractionary territory, though the latter exceeded expectations.

Thames Water is offering sweeteners to its most senior creditors in exchange for their support for its plan to raise £3 billion ($3.8 billion) of emergency cash, Bloomberg News reported. The beleaguered utility has modified its restructuring plan and has now offered to pay additional fees to the providers of its interest rate and index swaps, according to a statement by Thames Water on Friday. With these additional premiums the company is expecting — based on previous discussions — a sufficient majority of its derivatives counterparties to give the green light to its proposal.

A Surrey company director who fraudulently moved £100,000 in Covid-19 loans through his family's bank accounts has avoided jail, BBC.com reported. Muhammadh Chaudhry secured a £50,000 Bounce Back Loan for a media business in July 2020 and then fraudulently obtained another £50,000 loan for UK Media Kit Hire Ltd in September 2020, which he claimed was a film and TV production company. The 41-year-old then transferred the funds through savings accounts held by close relatives, the Insolvency Service said.

Britain's economy shrank for a second month in a row in October in the run-up to the government's first budget, the first back-to-back falls in output since the onset of the COVID-19 pandemic, and a setback for new finance minister Rachel Reeves, Reuters reported. Gross domestic product contracted by 0.1% month-on-month in October, as it did in September, the Office for National Statistics said. It was the first consecutive drop in monthly GDP - which is volatile and prone to revision - since March and April 2020, when Britain enforced its first coronavirus lockdown.

Germany’s economy will hardly grow in 2025 after shrinking again this year, according to fresh forecasts from Bundesbank, Bloomberg News reported. Gross domestic product will fall by 0.2% in 2024, it said Friday — slashing a June prediction for 0.3% growth. Output will expand by just 0.2% in 2025, rather than the 1.1% seen earlier, and could even fall if US trade tariffs materialize. “The German economy is not only struggling with persistent economic headwinds, but also with structural problems,” Bundesbank President Joachim Nagel said, highlighting the industrial sector in particular.

European Union bonds could pose a threat to Dutch bonds if they are reclassified as sovereign securities by index providers, said the head of the nation’s treasury agency, Bloomberg News reported. The government would prefer it if EU bonds continue to be treated as supranational debt, Saskia van Dun, head of the Dutch State Treasury Agency, said in an interview with Bloomberg, thereby avoiding any competition with bonds sold by member states. The EU has been advocating for its bonds to be treated as government debt so that it can access a wider pool of investors.

Altice France and a group of secured creditors remain at odds over the terms of a deal to cut the company’s €23.7 billion ($24.9 billion) debt pile, including how much equity billionaire owner Patrick Drahi should give up, Bloomberg News reported. The embattled French telecommunications company sent its latest proposal to lenders last week. The size of the equity stake was among points taken issue with by creditors, who had previously also disagreed over the cost of the reinstated debt and the haircut they would have to take, according to company disclosures last month.

The European Central Bank lowered interest rates for a third consecutive meeting, signaling more reductions next year as inflation nears 2% and the economy struggles, Bloomberg News reported. The deposit rate was cut by a quarter-point to 3% — as predicted by all but one analyst in a Bloomberg survey. That brings total easing since June to 100 basis points. Indicating its shifting stance, the ECB’s statement dropped wording saying policy will remain “sufficiently restrictive” for as long as necessary.