abrdn: ECB interest rate cuts ahead

abrdn: ECB interest rate cuts ahead

October 14, 2024

Interest Rates ECB
europese centrale bank (ECB).png

Felix Feather, Economist at abrdn, looks ahead to the upcoming ECB meeting:

'The ECB will almost certainly cut rates by 0.25% when it meets on Thursday. The move comes in response to weak growth and lower-than-expected inflation.

We think the bank is then likely to follow up with further 0.25%pt cuts in December, January, and March. However, risks both to the downside and upside remain.

Uncertainty stemming from geopolitical conflict in the Middle East has pushed oil prices higher, indicating elevated exogenous risks to the inflation outlook.

Meanwhile, even a relatively mild deterioration in the bloc’s growth performance is liable to push it into recession – something which could prompt the ECB to cut rates even more aggressively.'

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