Ecb Worried Over Inflation

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Ecb Worried Over Inflation

Inflation Remains A Worry For Ecb

On the surface, it looks like the inflation in the Eurozone is heading lower. However, there are many signs which signal worries for the ECB.

If the inflation stats to rise once again, it would make it tough for the ECB to continue its policy easing. This was revealed by the ECB at the January meeting.

Five Rate Cuts Since June

Since June 2024, the ECB has cut rates for a total of 5 times and has also hinted at more cuts in the near future. According to the ECB, the inflation is now headed towards the 2% target. This means there's no reason at all to restrict the economic growth.

According to analysts, yet another rate cut in March from the ECB is a high possibility. However, there is no clarity on whether we will get another rate cut in April and the next meetings.

ECB members agree on the fact that the disinflation process is on track. However, there are some risks which could put the process at risk.

The ECB policymakers have stressed the need for greater caution. They believe that the rate cuts should be adjusted to ensure it doesn't hinder the economic growth.

Almost everyone agrees that the ECB will cut the rates at the next meeting. By the end of 2025, the benchmark rate in Europe will likely drop to 2.0%.

The ECB has also made it clear that the current rates in the Eurozone are hindering economic growth. The long-term plan is to move towards natural rates, provided that inflation remains under control.

Looking ahead, the inflation levels in the Eurozone will remain a key factor for the upcoming rate cuts.

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