Interest Rates

Premature ECB rate cuts ‘would be worse’ than delaying them, economists say

In a survey, respondents now predict three, rather than four, rate cuts this year

Christine Lagarde, ECB president. ‘The current disinflationary process is expected to continue’. Picture: Getty

Lowering interest rates prematurely would be a worse mistake for the European Central Bank (ECB) than reducing them too late, according to a survey of economists who see one fewer cut now in 2024.

Almost two-thirds of respondents reckon moving too hastily to reverse the barrage of rate hikes enacted to tame inflation would carry greater dangers than waiting too long, a sentiment voiced by several members of the bank’s governing council.

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