Eurozone in Focus

ECB Expected to Cut Deposit Rate in September: Reuters Poll

Posted Thursday, July 18, 2019 by
Arslan Butt • 1 min read

According to a Reuters poll, the ECB could cut its deposit rate in September as the Eurozone’s economy is not expected to recover in the near future. Several leading central banks have been turning dovish lately amid fears of a slowdown in global economic growth and trade tensions.

A majority of economists polled are also expecting ECB to change its forward guidance to easing during its upcoming meeting this month. In September, economists are expecting the European Central Bank to cut its deposit rate by 0.10%, bringing the rate to an all-time low of -0.5%.

Inflation in the Eurozone continues to remain well below the central bank’s target at 1.3%, one of the key drivers for the rate cut. Expectations for quantitative easing have also gone up among economists, from 15% in the previous month to 40% in July.

Last week, the European Commission downgraded its economic growth and inflation outlook for the Eurozone over trade tensions because of the US. Economic growth is expected to have slowed down to 0.2% in the previous quarter, while inflation is expected to average 1.3% in 2019.

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