ECB to freeze rates, eyes upcoming data – economists
The European Central Bank (ECB) will keep interest rates unchanged on Thursday, maintaining the deposit rate at 3.75 per cent, while waiting for more definitive inflation data before considering further cuts, according to all 55 economists surveyed by Bloomberg.
Attention now shifts to the September meeting, where a second quarter-point rate cut is expected after analysing additional inflation, wage, and productivity data. ECB President Christine Lagarde will speak at 2:45 p.m. in Frankfurt, following the policy announcement.
Analysts forecast two more quarter-point cuts this year, in September and December, though some predict only one. ECB Chief Economist Philip Lane emphasised that the July meeting will focus on assessing current economic conditions, with Lagarde hinting at potential quarterly rate reductions depending on data updates.
To achieve its 2 per cent inflation target, the ECB relies on moderating wage growth, shrinking profit margins, and increasing productivity—a challenging mix to achieve.
Attribution: Bloomberg
