ECB likely to maintain deposit rate at 4.00% until year-end, poll suggests

A recent poll of 70 economists unanimously anticipates that the European Central Bank (ECB) will keep the deposit rate at its current level of 4.00% until the end of the year, according to data released on Tuesday. The survey also revealed that approximately 59% of these experts, or 41 out of 70, predict that the ECB will not consider a rate cut before the third quarter of next year, suggesting July as the earliest possible date for such a move.

The economists polled also shared their perspectives on the likelihood and timing of potential rate hikes. Although ECB President Christine Lagarde has not confirmed that rates have peaked, some analysts believe that the threshold for an additional increase is relatively high. This implies that the current rate of 4.00% might be the final level in this cycle.

While most economists do not view another rate hike as a core scenario, some admit there is a reasonable chance it could occur if strong wage growth and inflation persist until December.

On the topic of potential risks associated with future rate cuts, 23 out of 38 economists who responded to this specific question suggested they might occur earlier than their predictions. These economists believe there is a risk that any rate cuts could take place sooner than currently forecasted.


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