(Bloomberg) -- The European Central Bank is now likely to cut its deposit rate once a quarter through the end of next year, a timetable that will see its easing cycle end sooner than previously anticipated, according to economists.
A Bloomberg survey of forecasters shows that benchmark hitting 2.25% in December 2025 following six consecutive quarter-point reductions. Previously, respondents predicted that such a level would be reached only in the second quarter of 2026.
- Read more: SURVEY REPORT: Euro Area Economic Forecasts in Aug. 2024
The ECB started lowering borrowing costs in June amid increased confidence that inflation would fall back to its 2% target in due time. Officials have left little doubt that more rate cuts will follow, though they’ve refused to commit to a particular schedule, citing an uncertain economic backdrop.
Stubborn wage pressures feeding domestic inflation left some officials at the ECB’s last Governing Council meeting wondering whether there’s only room for one more step this year. Since then, the outlook has deteriorated, supporting those arguing for faster cuts.
Growth in the euro area’s private sector ground to a halt in July, and Germany remains a deadweight for the rest of the region. Economists in the survey lowered their projection for Europe’s largest economy and see expansion of just 0.1% this year.
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