[ad_1]
The European Central bank (ECB) is expected to cut its deposit rate by 25 basis points on Oct. 17 and again in December, as per a Reuters poll of economists. The majority of economists now anticipate a quicker decline in euro zone Inflation, with over 90% of respondents predicting rate cuts in October and December. ECB President Christine Lagarde and other Governing Council members have hinted at a reduction in the deposit rate due to Inflation dipping below 2% in September.

Economists initially predicted three rate reductions this year but now expect a total of four, with the deposit rate projected to reach 3.00% by December. The path to achieving the ECB’s target Inflation rate of 2% is expected to be quicker than previously anticipated, with expectations of two rate cuts in the next quarter. Inflation in the euro zone is forecasted to reach the target rate next quarter and remain around that level until at least 2027, according to the poll results.

While recent PMIs indicate a slowdown in the economy, the euro zone is projected to grow at a steady pace over the next year. Germany, the largest economy in Europe, saw stagnation last quarter but is forecasted to grow by 0.1% this quarter and show further growth in 2025 and 2026. Core Inflation is expected to remain elevated this quarter before gradually slowing down next year. Despite the economic challenges, the euro zone economy is anticipated to expand by 0.7% this year, with growth rates of 1.2% in 2025 and 1.4% in 2026.

[ad_2]
SOURCE