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Friday, March 1, 2024

Scissors to interest rates 4 times by the ECB this year

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The European Central Bank will cut interest rates four times this year as inflation eases faster than previously expected, according to a Bloomberg poll of economists.

The cuts, each of 25 basis points, are expected to begin in June, with further cuts in September, October and December bringing the deposit rate to 3%.

Although this is a move above than expected in last month's survey, is still more conservative than the six cuts starting in April that investors are pricing in.

Policymakers are focusing particularly on wage developments in the first half of the year of 2024, to confirm that rising labor costs will not prevent inflation from slowing to the 2% target.

Economists now expect price growth to ease faster – to 2.3% in 2024. This is a downward revision of 0.3 percentage points compared to the December poll.

Source: 24h.com.cy

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