Analysis-What rate hike? Investors eye ECB rate cuts as economy weakens

Published by
Reuters UK

By Yoruk Bahceli and Naomi Rovnick (Reuters) – Traders are standing firm on bets that the European Central Bank will cut interest rates next year, challenging the bank’s “higher rates for longer” signal in the face of a souring economy. The European Central Bank raised its key rate to a record 4% on Thursday and revised up its inflation forecast for next year, but with the euro zone economy in the doldrums, it signalled that the hike was likely its last. Traders cheered the expected end of rate hikes that have raised borrowing costs from minus 0.5% in just over a year. That sent euro zone gove…

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