ECB expected to implement further interest rate cuts amid slowing inflation

9/11/2024 9:11:20 AM

(MENAFN) The European Central bank (ECB) is anticipated to announce another reduction in interest rates this week, following a period of easing inflation towards its 2 percent target. This move comes after the ECB began its aggressive interest rate hikes in mid-2022 to address high consumer prices, only to start easing monetary policy as inflation rates showed signs of improvement. The Frankfurt-based institution, which oversees monetary policy for the 20 euro-using countries, had previously cut its main deposit rate from a historic peak of 4 percent to 3.75 percent in June.

After maintaining the rate in July, the ECB’s Governing Council is expected to implement a further quarter-point reduction on Thursday, providing additional relief to households and businesses. This would mark only the second rate cut by the ECB since 2019. Analysts at HSBC noted that the market is fully anticipating this cut, with a broad consensus among Governing Council members supporting the decision. Confidence in further rate reductions has been bolstered by recent data showing that inflation, which had been volatile over the past year, is now trending downwards. In August, eurozone inflation dropped to its lowest level in over three years, with consumer price growth slowing to 2.2 percent from 2.6 percent in July, edging closer to the ECB's target.

MENAFN11092024000045015682ID1108662041

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.