LONDON (Reuters) -Several brokerages now expect the European Central Bank to deliver a quarter-point cut at its Oct. 17 meeting, as data showing economic weakness and slowing inflation pushes policy makers to focus more on growth and less on price pressures.
Market pricing now reflects around an 80% chance of such a rate cut, which would follow reductions at the ECB’s June and September meetings.
Euro zone business activity contracted sharply and unexpectedly in September, surveys showed, as the bloc’s dominant services industry flatlined and a downturn in manufacturing accelerated, while inflation in France and Spain for September came in very soft.
Sources told Reuters that ECB policy doves are preparing to fight for an October rate cut – though this would likely meet resistance from more conservative peers – a turnaround from the aftermath of the ECB’s September meeting when they saw an October move as unlikely.
Here are the latest forecasts from some brokerages.
Rate cut
Brokerage estimates
(bps)
Terminal
Oct ’24 Dec rate/ end ’25 forecast
’24
Goldman 25 25 2.0% (June 2025)
Sachs
Deutsche – 25 2.0%-2.5% (mid-2025)
Bank
HSBC 25 25 2.25% (April 2025)
BNP 25 25 2.25% (end-2025
Paribas forecast)
RBC 25 25 2.25% (April 2025)
25 25 2.0% (June 2025)
JP
Morgan
Barclays – 25 2.50% (end 2025
forecast)
Citi – 25 likely under 2%
UBS IB – 25 2.25% (end-2025
forecast)
ING – 25 2.25% (end 2025
forecast)
BBVA (BME:) – 25 2.75% (November 2025)
SEB – 25 2.00% (end 2025)