The ECB has been vocal about the need for more conclusive evidence of declining inflation and cooling labour markets, before cutting rates.
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    4 months ago

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    The ECB has been vocal about the need for more conclusive evidence of declining inflation and cooling labour markets, before cutting rates.

    The European Central Bank (ECB) will announce its March interest rate decision on Thursday afternoon and is expected to keep interest rates at a 22-year high of 4.5% for the fourth time in a row.

    This could potentially put more pressure on Lagarde to cut interest rates in the near future.

    David Powell, senior euro-area economist for Bloomberg Economics, as reported by Bloomberg said: 'We expect Lagarde to use downward revisions to the forecasts of the ECB’s staff economists to set the stage for a cut, but she’ll probably argue that policymarkers can’t move until they have more data on wages."

    Most analysts foresee an ECB rate cut by June this year, once there is more information about whether European labour markets are cooling or not.

    It has also warned of the dangers of rebounding inflation, highlighting that it may be better to keep interest rates higher for a little longer, to avoid this situation.

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