Published on September 10, 2024 MADRID, Sep 8 (EUROPA PRESS) – The European Central Bank (ECB) will cut interest rates by 25 basis points at its meeting next Thursday, September 12, and will continue with the normalization of its monetary policy started in June and paused at its July meeting, according to experts consulted by Europa Press. Specifically, Bank of America expects the issuing institute to choose to reduce the deposit rate by 25 basis points and exhibit potentially accommodative rhetoric, while the rest of the interest rates would be adjusted downwards by 35 points. BOFA does not expect any changes to the ECB's roadmap for the future and anticipates that the “weak economic recovery” and stagnant inflation could lead it to lower the price of money to 2% by the third quarter of 2025 at the latest. Santalucía Asset Management expects the current cycle of reductions to continue, in line with market expectations. “The good evolution of inflation, together with the recent weakness in the price of crude oil and the strength of the euro, should give the ECB comfort to continue relaxing its monetary policy,” explained Luis Merino, head of Fixed Income, Mixed and Fund Selection at Santalucía AM. Similarly, Ebury market analyst Itsaso Apezteguia also maintains that the ECB will cut by 25 basis points. However, he believes that investors are assuming that rates will be cut three times this year, something that Apezteguia considers to be an “overly aggressive” easing that will ultimately be carried out in just two moves, one in September and another in December. For his part, XTB senior analyst Joaquín Reyes also predicts that the organisation headed by Christine Lagarde will opt for a second cut of a quarter of a point. Likewise, Banco Sabadell considers such a reduction “totally discounted”.
ECB to cut interest rates by 25 basis points at Thursday's meeting, experts say
