- Djokovic hails Nadal 'legacy' as Alcaraz in 'shock' over retirement
- Obama hits campaign trail for Harris
- Delta eyes Election Day travel pullback as profits climb
- Djokovic tells Nadal: 'Your legacy will live forever'
- Ethel Kennedy, wife of RFK, dead at 96
- Zelensky denies ceasefire with Russia under discussion on trip
- Florida battered by hurricane, floods but spared 'worst-case scenario'
- After long fight for glory, Nadal leaves with a legacy of memories
- Home hopes Zheng and Wang through to last-eight in Wuhan Open
- UN peacekeepers say Israel fired on Lebanon HQ, injuring 2
- UK's William and Kate in first joint public engagement since cancer treatment
- Alcaraz out as top players pay tribute to Nadal at Shanghai Masters
- Racing's Farrell 'not thinking' about British and Irish Lions
- Alcaraz, Sinner pay tribute to 'unbelievable' Nadal at Shanghai Masters
- Over 200 women in legal talks with Harrods over Fayed abuse claims
- After K-pop, K-novels? South Korean Nobel win sparks joy, hope at home
- After Nadal exit, Djokovic left to rage against dying of the light
- A very stiff breeze: BBC says sorry for 20,000 kph wind forecast
- Triple centurion Brook happy to break Dad's club record
- Zelensky touts 'victory plan' against Russia in Macron talks
- Musk finally unveiling his long-promised robotaxi
- UN peacekeepers accuses Israel of firing on Lebanon HQ
- London's Frieze art fair goes potty for ceramics
- Southgate taking year out from coaching
- US, Europe stocks fall on US inflation data
- Zelensky meets Macron in Paris as part of European tour
- Hurricane Milton shreds Florida stadium roof
- UN probe accuses Israel of seeking to 'destroy' Gaza healthcare
- US consumer inflation eases to 2.4% in September
- England in sight of victory after Brook's triple hundred
- Juventus readmitted to ECA after failed Super League revolt
- World number 2 Alcaraz knocked out of Shanghai Masters by Machac
- Leaders of Egypt, Eritrea, Somalia meet amid regional tensions
- Klopp's Red Bull decision 'ruined life's work' say Dortmund fans
- Han Kang wins South Korea's first literature Nobel
- S. Korea's Nobel winner Han Kang a modest, thought-provoking writer
- Hurricane Milton tornadoes kill four in Florida amid rescue efforts
- The almost impossible job: Beating Rafael Nadal at the French Open
- New French government faces key test with budget plan
- Rescuers say Israeli strike on Gaza school kills 28
- Italy's ex-world champion gymnast Ferrari announces retirement
- Zelensky talks 'victory plan' in meeting with Starmer, Rutte
- South Korea's Han Kang wins literature Nobel
- Federer lauds retiring Nadal's 'incredible achievements'
- Ikea posts fall in annual sales after lowering prices
- Australia beat China 3-1 to resurrect World Cup campaign
- Stock markets diverge, oil gains after China rebounds
- Nadal defied injury woes in record-breaking career
- Nadal v Djokovic, French Open, 2006: Chapter One in epic rivalry
- World can't 'waste time' trading climate change blame: COP29 hosts
CMSC | 0.16% | 24.56 | $ | |
NGG | 0.21% | 65.765 | $ | |
BTI | -0.68% | 35.24 | $ | |
RYCEF | 0% | 6.9 | $ | |
BP | 1.05% | 32.32 | $ | |
RELX | -0.61% | 46.425 | $ | |
AZN | -0.94% | 76.785 | $ | |
GSK | -2.61% | 39.215 | $ | |
RIO | 0.13% | 66.435 | $ | |
RBGPF | 4.03% | 63.35 | $ | |
SCS | -3.49% | 12.59 | $ | |
BCC | -1.69% | 140.02 | $ | |
CMSD | 0.08% | 24.7 | $ | |
JRI | -0.05% | 13.214 | $ | |
VOD | -0.46% | 9.685 | $ | |
BCE | -1.54% | 32.805 | $ |
ECB tipped to pause one last time before June rate cut
Buoyed by falling inflation, the European Central Bank is expected to keep borrowing costs on hold one last time Thursday while laying the ground for a first interest rate cut in June.
The Frankfurt-based institution has left its key rates unchanged since October 2023, following an unprecedented streak of hikes to tame red-hot inflation.
ECB president Christine Lagarde said after last month's meeting that governing council members were not "sufficiently confident" yet on inflation to consider loosening the reins.
The case for rate reductions has strengthened since then, with eurozone inflation slowing more than expected in March to 2.4 percent -- bringing the ECB's two-percent goal within reach.
A change of course as early as this week seems highly unlikely however, after ECB officials repeatedly said they were awaiting data that won't be available until their meeting on June 6.
"We will know a bit more by April and a lot more by June," Lagarde reiterated in late March, referring in particular to data on eurozone wage growth.
In June, the ECB will also have its own updated forecasts on inflation and economic growth.
Thursday's ECB meeting therefore "looks like the prelude to yet another turning point for monetary policy in the eurozone: final stop before the cut", said ING bank economist Carsten Brzeski.
- Stuttering economy -
The ECB's benchmark deposit rate currently sits at a record four percent, following an aggressive hiking campaign to rein in consumer prices driven higher by Russia's war in Ukraine and pandemic-related supply disruptions.
Eurozone inflation, which peaked at over 10 percent in late 2022, has steadily declined in recent months and is now expected by the ECB to return to target in 2025.
But the higher borrowing costs have taken a toll on the eurozone economy, dampening demand as households and businesses feel the squeeze from more expensive loans and mortgages.
The 20-nation currency club only narrowly avoided a recession in the second half of 2023, weighed down by a poor performance in its largest economy, Germany.
Like other central banks, the ECB is now weighing the best time to switch gears and support economic growth through lower rates -- without endangering the progress on inflation.
The Swiss National Bank kicked off the rate-cutting cycle last month when it lowered its main rate by 0.25 percentage points -- becoming the first major central bank to do so.
The US Federal Reserve, which began hiking earlier than the ECB and has kept rates steady at recent meetings, is expected to sit tight a while longer in the face of a robust economy.
- Ahead of Fed -
Fed chairman Jerome Powell said last week that the high benchmark rate was "doing its job" against elevated inflation, warning that lowering it too soon could be "quite disruptive" for the American economy.
The possibility of the ECB slashing rates before the Fed has worried some observers.
Lower rates in the eurozone could prompt investors to look elsewhere for higher returns, weakening the euro and making imports more expensive -- potentially reigniting inflation.
But Jack Allen-Reynolds from Capital Economics said he believed the ECB "won't wait for the Fed".
"The two central banks will be responding to different data. At the moment, the data arguably support an earlier cut by the ECB because economic growth is much weaker in the eurozone," he said.
Once the ECB does start loosening its monetary policy, attention will quickly shift to the pace and size of future rate cuts.
Many observers are pencilling in at least three to four cuts this year, by 25 basis points each time.
Lagarde however has said the ECB would not "pre-commit to a particular rate path", stressing that future decisions would depend on incoming data.
L.Mason--AMWN