Wednesday, October 25, 2023 - Amidst an ongoing economic downturn characterized by negative consumer sentiment and a low manufacturing PMI in the eurozone, the European Central Bank (ECB), based in Frankfurt, is expected to maintain its 4% deposit rates in an upcoming decision session taking place in Athens, Greece.
The economic slump has notably impacted Germany, the largest economy in the eurozone. This has led to a profit warning from Worldline WO6, indicating the challenges that businesses face in the current economic environment.
Inflation has shown signs of slowing down, declining from 5.2% in August to 4.3% year-on-year in September. This decrease could potentially provide some relief to consumers and businesses grappling with the economic downturn.
Despite this challenging scenario, ING's economist Carsten Brzeski suggests that a potential rate hike could still be on the horizon. Citing rising oil prices and revised inflation forecasts for 2024, Brzeski does not rule out a potential increase in rates as early as December. It remains to be seen how the ECB will navigate these complex economic conditions in its upcoming decision session.
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