The European Central Bank (ECB) will unveil its latest monetary policy decision on July 18 and the question on everyone's lips is if the institution will cut its interest rate for the second time in a row or go back to keeping them steady.
Based on what the members of the bank's Governing Council have been saying recently, the majority of experts do not project another reduction. Such comments were made by President Christine Lagarde as well as those sitting on the Council, such as Joachim Nagel of Germany's Bundesbank and Klaas Knot of the Dutch De Nederlandsche Bank. The analysts predict that, as the annual inflation in the Eurozone has still not come near the target of 2%, the bank will not be rushing to exaggerate with loosening its monetary policy. Moreover, they expect the ECB to prepare the ground to impose new cuts in September and December, and hence, skip July, October, and January.
Another reason that makes the experts believe the ECB will not go for reducing the rate in July is the content of its minutes from the Council's previous meeting, which revealed that some of the members still doubt the annual inflation rate is on the route to 2% and want to see new reports before being certain the fight against inflation is on a stable path. Furthermore, the members predicted the figure will reach that target in 2025, indicating they see no need for a rush in lowering the rates in 2024.
