According to a recent survey of economists, the European Central Bank will not cut interest rates until September 2024, indicating that people are digesting the message from policy makers that rate cuts will not come soon.
According to the latest survey results from the media, more respondents believe that the European Central Bank will maintain high interest rates until September 2024. This is significantly different from the previous round of surveys, where respondents still believed that borrowing costs would decrease in March next year and were expected to lower interest rates again in October.
This investigation is consistent with the remarks made by European Central Bank officials on the sidelines of the International Monetary Fund (IMF) Marrakesh annual meeting in recent days.
Last month, the European Central Bank raised interest rates for the 10th consecutive time, pushing them to a historic high, with a cumulative increase of 450 basis points.
At the end of last month, preliminary statistical data released by the Eurostat showed that due to the base effect and declining demand, the annual inflation rate of the eurozone in September slowed from 5.2% to 4.3%, exceeding expectations. Among them, energy prices decreased by 4.7% year-on-year.
Martins Kazaks, a member of the European Central Bank's management committee, stated during the IMF annual meeting that the "narrow road" towards inflation returning to 2% cannot rule out the possibility of an unprecedented series of interest rate hikes continuing to be extended.
The current economic forecast is no longer the previous "interest rate cut in the first half of 2024", Kazaks pointed out, "We will wait and see in the second half of this year
Peter Kazimir, the managing director of the European Central Bank, stated that it may take another year for the ECB to consider cutting interest rates. He does not believe that the ECB will change its monetary policy before next summer, and the current focus is to maintain high interest rates.
Bostjan Vasle, the Central Bank Supervisory Committee and Governor of the Slovenian Central Bank, said that the central bank should start discussing quantitative tightening and consider all options. The rise in bond yields indicates that investors have also accepted "longer periods of high interest rates".
In addition, analysts surveyed believe that price increases in Europe will slow to 2.7% next year and 2.1% in 2025; The survey also shows that the economic growth in the region is expected to be lower than before, with a growth rate of only 0.7% next year after growing by 0.5% in 2023.
Last week, the IMF lowered its Eurozone growth forecast for 2023 by 0.2 percentage points to 0.7%; The growth forecast for 2024 has been lowered by 0.3 percentage points to 1.2%.