The euro zone central bank will need to do 'heavy lifting' next year to support the waning economy, analysts say.
The European Central Bank is widely expected to deliver a 25-basis-point rate cut on Thursday, rather than a "jumbo" 50-basis-point move previously thought to be on the table.
The bloc's central bank has so far lowered its key rate from 4% to 3.25% this year across three 25-basis-point increments between "Inflation, at least over the short term, is under control. But as long as labor costs increase above productivity, the ECB should remain on the cautious side, or on the wait-and-see side for cutting rates."
They added that they expected a "benign market reaction," even if ECB President Christine Lagarde shifts her messaging in a more dovish direction.Bank of America Global Research on Tuesday updated its forecast from a pace of rate cuts taking the deposit facility to 2% by June next year, to a clip leading the rate to 1.5% by September.
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