Inflation

Analysis: As inflation slows, will the ECB finally climb down on interest rates next week?

Julien Lafargue, chief market strategist at Barclays Private Bank, said that the ECB appears ‘ready to go’ on cuts

Christine Lagarde, the ECB president, last month poured cold water on the prospect of imminent cuts to interest rates. Picture: Kirill Kudryavtsev

It is becoming more and more difficult for the European Central Bank (ECB) to downplay the expectation of imminent interest rate cuts.

This week euro-area inflation inched closer to 2 per cent, as consumer prices recorded an annual rise of 2.4 per cent in February.

The more pronounced than expected slowdown has bolstered the prospect of long-awaited cuts ahead of the ECB’s latest monetary policy meeting.

At its last meeting in January, the ECB retained the record-high of 4.5 per cent for lending rates for the second quarter running, following ten successive hikes in a row from July 2022.