Markets are eyeing two more rate cuts from the euro area's central bank this year amid a weak growth outlook and lower inflation.
The European Central Bank is on course to deliver its third interest rate cut of the year at its meeting this Thursday, as policymakers say inflation risks are easing faster than previously expected.
European flags flutter in front of the European Central Bank building prior to a news conference following the meeting of the governing council of the ECB in Frankfurt/Main, Germany, on September 12, 2024.The European Central Bank is on course to deliver its third interest rate cut of the year at its meeting this Thursday, as policymakers say inflation risks are easing faster than previously expected., below the central bank's 2% target.
Composite purchasing managers' index figures, which measure services and manufacturing activity, point to stagnation in the third quarter, according to consultancy Capital Economics. That would followTight monetary policy is providing a drag on growth, in addition to structural issues such as the decline in German industrial competitiveness, Jack Allen-Reynolds, Capital Economics' deputy chief euro zone economist, said last week.
"In our view, this is the start of that accelerated trajectory to 2% by June 2025 and further to 1.5% by end-2025," they said.
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