What's happened
Inflation in the eurozone fell to 1.8% in September, down from 2.2% in August, prompting speculation about potential interest rate cuts by the European Central Bank (ECB). With economic growth sluggish, markets now anticipate a rate cut at the ECB's upcoming meeting on October 17.
Why it matters
What the papers say
According to the New York Times, 'the chance that policymakers will cut rates at their meeting this month rose above 90 percent.' This sentiment is echoed by The Independent, which notes that 'economists have started to consider the possibility of a rate cut at the bank's Oct. 17 meeting.' However, some analysts caution that persistent inflation in the services sector may delay further cuts, as highlighted by Megan Greene's comments on the need for a cautious approach to monetary policy. The Independent also emphasizes the delicate balance the ECB must maintain between controlling inflation and supporting economic growth.
How we got here
The eurozone has struggled with inflation since the pandemic, with rates peaking above 11% in late 2022. The ECB has cut rates multiple times in recent months, but inflation remained above its 2% target until now, raising concerns about economic growth.
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