ECB Rate Cut Expectations Grow as Inflation Remains Steady in Eurozone

The inflation rate in the 20-nation euro area remained unchanged at 2.4% for April, according to preliminary figures released on Tuesday. Economists polled by Reuters had predicted this figure. Core inflation, which excludes volatile items such as food and energy prices, dipped slightly from March’s rate of 2.9%. As the eurozone economy returned to growth in Q1 after a contraction during Q4 last year, market expectations are mounting that the European Central Bank (ECB) will cut interest rates at its next monetary policy meeting on June 6th. LSEG data suggests nearly a 70% probability of such action being taken as soon as this month’s gathering, with higher probabilities for cuts in July or September also emerging. Several ECB voting members have previously stated that they anticipate an interest rate reduction during the next meeting due to concerns about excessive economic slowdown and external factors like oil prices and Middle Eastern volatility. This article will be updated as further information becomes available.