The European Central Bank is likely to abandon its more dovish bias at its next meeting and shift its signal to more openness to future rate cuts, HSBC’s Fabio Balboni and Simon Wells said in a note.
That would pave the way for further cuts next year, although a big 50 basis point cut in December seems unlikely given that policymakers have recently called for a gradual approach, economists say.
However, any further disappointments with economic data, or a faster decline in inflation at the start of 2025, could mean accelerated interest rate cuts.
The recent decline in consumer confidence is likely to cause some concern, given that consumer demand is central to the ongoing growth story, say economists at HSBC.
