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2025-08-01 18:00:23
[Expectations for a rate cut take a sharp turn, will the ECB remain on hold in September?] ⑴ Eurostat data shows that eurozone consumer prices rose 2.0% year-on-year in July, matching the inflation rate in June. ⑵ This figure was slightly higher than the market expectation of 1.9%, defying previous predictions of a possible decline in inflation. ⑶ Prior to this, economic activity in the eurozone grew better than expected in the second quarter, demonstrating some resilience. ⑷ Several factors may impact future inflation, such as the uncertainty created by Trump's tariff rhetoric and the potential changes to trade agreements that may result from it. ⑸ Although there are signs that service sector inflation slowed in July, indicating that the momentum of price pressures is weakening, ⑹ However, given that inflation remains stable at target and economic growth has unexpectedly outperformed expectations, institutions such as Barclays no longer expect the ECB to cut interest rates in September. ⑺ The ECB President previously stated that the bank is "well-positioned" for inflation and will not react to "small fluctuations" away from its target. ⑻ This series of data and statements suggests that the ECB may maintain its key interest rate unchanged in September.
