Europe | ECB hastens the easing cycle

Summary

The ECB cut its key interest rates by 25 basis points, as expected, following signals given by Lagarde in September in her speech at the European Parliament, due to lower inflation and weak activity data. We expect another 25 basis point cut in December.

Key points

• Key points:
• The ECB lowered its policy rates by 25bps, as anticipated, and sounded dovish
• President Lagarde acknowledged downward surprises on inflation and economic activity, but ruled out an imminent euro zone recession; disinflation process is well on track
• The ECB continues to follow a "data-dependent" approach. We anticipate another rate cut in December

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