Today, the European Central Bank is expected to make its third rate cut of the year, dropping its deposit rate to 3.25%. The decision comes amid a welcome slowdown in global inflation, allowing central banks to lower interest rates. The ECB’s move is seen as necessary after eurozone inflation fell below the 2% target in September. President Christine Lagarde is likely to leave the door open for another cut in December.
With European countries like Germany facing economic struggles, lower interest rates would be welcomed by both businesses and consumers across the eurozone. Last week, Greece’s central bank governor pushed for faster rate cuts, highlighting the need for more accommodative monetary policy.
Market watchers predict that the ECB will deliver the 0.25% rate cut today, as concerns linger over a potential growth slowdown and geopolitical tensions. The decision is expected to be influenced by recent weaker PMI business survey data. Overall, markets would be surprised if a cut didn’t happen, given the current economic conditions.
The monetary policy decision will be closely watched today, along with other key events such as the final reading of Eurozone inflation, US retail sales for September, and US weekly jobless claims. The outcome of the ECB meeting and its implications for the economy will be discussed in the press conference scheduled for 1:45 pm BST.
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