Report: ECB is likely to cut interest rates by 25 basis points next week

Ulrich Kastens, economist at German asset management company DWS, said that the European Central Bank may cut deposit rates by 25 basis points to 3.00% next Thursday, instead of choosing a larger cut of 50 basis points. The economic outlook for the eurozone has deteriorated, but the improvement in inflation expectations has exceeded expectations, which is not enough to make the central bank cut rates significantly. LSEG data shows that the current probability of the European Central Bank cutting interest rates by 25 basis points is 87%, while the probability of cutting interest rates by 50 basis points is 13%.