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A new reduction in euro interest rates is coming in September

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Inflation in the Eurozone fell to 2.2% in August

Ερενωη ει&tau ;οον τορσεβριο /></p> <p>Speaking to Bloomberg, Madis Miller, head of the central bank of Estonia, emphasized that “we are increasingly confident that in September we will proceed with a reduction in interest rates” </p> <p>Expectations for a euro rate cut at the ECB's next meeting in less than two weeks are building as Eurozone inflation eases steadily and is now at its lowest level since mid-2021. According to Eurostat data, it fell in August to 2 .2%, down significantly from 2.6% in July, while core inflation, which excludes volatile food and energy prices, eased to 2.8% from 2.9% in July.</p> <p>The encouraging data will thus maintain the climate of optimism that prevailed a few days ago at the annual meeting of the Federal Reserve in Jackson Hole, when the president of the Federal Reserve, Jerome Powell, said that a reduction in the interest rates of the dollar is imminent in September, thus aligning with the respective policy of the ECB and Bank of England.</p> <p>Investors are betting on two or three interest rate cuts from the ECB this year, followed by more in 2025. Speaking to Bloomberg, Madis Müller, head of Estonia's central bank, said “we are increasingly confident that the In September we will proceed to reduce interest rates”. At the same time, his Portuguese counterpart Mario Centeno recently favored a relaxed 25 basis point cut from 3.75% to 3.5%. In recent days, however, the voices of powerful officials who warn that the battle against inflation is not over have become louder.</p> <p>The latest was yesterday Isabelle Schnabel, a member of the ECB's Executive Committee, who expressed the assessment that the risk of inflation has not passed, particularly in terms of prices in the service sector, and that the ECB should not be in a hurry to reduce borrowing costs rapidly. In a speech in Tallinn, Estonia, she emphasized that “the return to a stable price situation is based on a set of critical factors, which is why policy change must be done gradually and carefully and not mechanically. It has to be based on data and analysis.” Indeed, the data provided by Eurostat yesterday show that inflation in the services sector accelerated in August due to increases in the wages of workers in the sector and reached 4.2%.</p> <p>According to ECB forecasts, Eurozone inflation is on track to stabilize at levels close to the 2% target around the end of next year. Its forecast, however, also includes ups and downs in the index along the way until the end of 2025. It is based, after all, on the expectation that wage increases will slow down, corporate profits will absorb a portion of wage increases and productivity will be strengthened of labor in order to reduce the cost per unit of production. So far in the second quarter of the year productivity upgrades have been disappointing, but wage increases have slowed. At the same time, other data show that unemployment in the Eurozone marked a significant drop to 6.4% and its fall could stimulate the Eurozone economy, whose low levels strengthen the argument of those who urgently ask the ECB to proceed with a reduction of the borrowing costs at its meeting on September 12.</p> <p><noindex></p> <div class=Source: www.kathimerini.com.cy

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