The European Central Bank kept interest rates steady during the last meeting after it cut interest rates in June which was the first time the ECB has cut interest rates since 2019, investors are now hoping that there will be another cut on the way today, September 12.
Some ECB members have recently hinted that further monetary policy easing may be appropriate this month given the recent data, but the bank's Governor Christine Lagarde has refrained from making any direct statements on this issue, refusing to commit in advance to any specific policy path.
Considering inflation, since the beginning of 2024, the annual inflation rate in the eurozone has been high, but it found itself falling at 2.2% levels last August, recording its lowest level in more than three years.
But the annual core inflation, excluding energy, food, alcohol and tobacco, was that it is somewhat more stable, reaching 2.8% in August as well. But it still fell to a four-month low.
It may be difficult to predict that the inflation figures will go to the levels of 2% sustainably, but they are much lower compared to last year, when the annual inflation rate and core inflation in the reported month were 5.2% and 5.3%, respectively.
On the other hand, the Consumer Expectations survey conducted by the bank last July showed that the forecast for economic growth in the eurozone over the next twelve months deteriorated from -0.9% to -1%, and GDP growth for the second quarter of 2024 amounted to 0.2%, down from the previous forecast of 0.3%.
With all this in mind, the European Central Bank is likely to cut interest rates by 25 basis points at its meeting on Thursday, and the ECB will also update its macroeconomic forecasts today, which were last released in June.
