• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Editor's Pick

ECB cuts rates as expected, says well on track to tame inflation

by October 17, 2024
written by October 17, 2024

(Reuters) – The European Central Bank cut interest rates for the third time this year on Thursday in a nod to sluggish economic growth, some softening in an otherwise rock-solid labour market and easing consumer price pressures.

The ECB cut its deposit rate by 25 basis points to 3.25% as forecast in a Reuters poll of analysts, in a tacit acknowledgement that inflation, now below 2%, could settle around its 2% target quicker than previously thought.

But the bank gave no new clues about its next move, even if markets expect similar cuts at each of its next three meetings, taking the rate from a level where it restricts growth to at least a neutral setting by the end of next year.

“The incoming information on inflation shows that the disinflationary process is well on track,” the ECB said in a statement. “The inflation outlook is also affected by recent downside surprises in indicators of economic activity.”

A cut was widely expected after policymakers made the case for quicker policy easing in the run-up to the meeting on a series of weak growth readings and benign inflation data.

Poor sentiment indicators, weak consumer spending and a prolonged industrial recession suggest that the bloc is barely growing, which will put downward pressure on inflation, which slowed to 1.7% last month, its lowest level in three years.

“Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation,” the ECB added.

But policy hawks are still likely to oppose quick rate cuts given that inflation could tick up in the coming months.

The labour market remains tight, unions continue to demand big wage increases, energy costs are volatile and services prices are still rising quickly, all of which suggests domestic inflation could remain relatively high for some time to come.

However, doves argue that growth is now so weak that unless the ECB acted quickly to shore up the bloc, inflation could actually fall below target and the ECB would have to go from fighting rapid price growth to excessively low inflation.

This debate is unlikely to have been settled on Thursday so ECB President Christine Lagarde may well offer no commitments and few clues about any future policy moves at her 1245 GMT news conference.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Nigeria seeing positive results from fiscal reforms, World Bank says
next post
US retail sales increase solidly in September

You may also like

China central bank conducts 1.7 trln yuan of...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

ECB president fears loss of central bank independence

January 27, 2025

European tech shares tumble as China’s AI push...

January 27, 2025

Futures slip as investors eye China’s latest AI...

January 27, 2025

Markets may be repeating the mistake of 2019,...

January 27, 2025

How billionaire Caltagirone could influence Italy’s banking M&A...

January 27, 2025

How Italy’s MPS went from near collapse to...

January 27, 2025

Analysis-To weather Trump, emerging market investors look to...

January 27, 2025

Chinese AI startup DeepSeek overtakes ChatGPT on Apple...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 5, 2025
    • This California startup is cleaning water and removing CO₂ from the atmosphere — all at a reduced cost

      June 5, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (504)
    • Stock (6,426)

    Latest News

    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

    Popular News

    • Holiday shopping season: Amazon leads on price/selection, eBay for best value
    • Boeing to issue layoff notices to thousands next month, union and source say

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy