HSBC said this week that it now expects the European Central Bank to cut interest rates by 25 basis points at every meeting from October through to April next year given weakening economic data.
That would take the key deposit rate to 2.25 per cent. “At this point, policy should be close to neutral or even mildly stimulative. Previously we had expected cuts every other meeting until the key deposit rate hit 2.50 per cent in September 2025.”
Survey data released on Monday showed euro zone business activity as a whole contracted sharply and unexpectedly this month as the dominant services industry flatlined, boosting expectations that the ECB could cut rates again soon.
The central bank, in September, delivered its second rate cut of the year.
