ECB struggles with inflation: weak economy calls for rapid interest rate cuts, which are unlikely to happen!

The European Central Bank (ECB) will not respond to the weakening economy in the euro zone with rapid interest rate cuts, according to the results of an analyst survey.

After the first cut in the deposit rate in June, the ECB plans to continue cutting interest rates on a quarterly basis. This course is to remain in place until September 2025, although interest rates could remain at low levels until 2026. The next ECB meeting will take place on September 12, 2024.

The economy is weakening and price pressure is continuing. “The weak economy speaks in favor of a loose monetary policy,” explains Dennis Shen of Scope Ratings. He warns that inflation has not yet been defeated.

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