ECB will Cut Rates
Publish Date : 2019/07/18 - 10:43

The European Central Bank will cut its deposit rate in September, according to economists.

Major central banks on both sides of the Atlantic are under pressure to ease monetary policy to keep inflation expectations from collapsing amid slowing global growth, increased trade protectionism and weak economic data.

Two-thirds of economists believed that ECB would change its forward guidance in July meeting towards easing. They said that with inflation well below the central bank’s target and not predicted to pick up soon, the ECB is expected to cut its deposit rate by 10 basis points.

Euro zone inflation at 1.3% is lower than where it stood when the central bank stopped its 2.6 trillion euro (£2.3 trillion) asset purchase program in December.

While a majority of economists do not expect the ECB to relaunch asset purchases — QE — this year, nearly 40% of the respondents expected it to do so, up from about 15% last month.

“A rate cut won’t do. While we do think that the ECB will cut rates, we mostly see this as a policy move that will precede the restart of QE,” said Daniele Antonucci, chief euro-area economist at Morgan Stanley.


Source: Reuters.com

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