A recent string of indicators pointing to the Eurozone’s slowing growth will probably lead to a 0.25 per cent interest rate cut by the European Central Bank next month, economists predict.
The long-standing consensus among economists until this week was that the ECB would wait at least until December before deciding on a further rate cut, after two such moves in June and September brought down the key deposit rate to 3.5 per cent.
But weak inflation data in France and Spain combined with an unexpectedly low Purchasing Managers’ index (PMI) for the Eurozone this week changed that general-held view, with many economists now expecting a rate cut in October.