![]() ![]() The ECB broke a streak of ten straight rate hikes last month, fuelling market expectations that its next move will be a cut, possibly as soon as April, with a total of 90 basis points of reductions priced in by the close of next year. Meanwhile, rapid wage growth in the euro zone could keep inflation elevated longer and the European Central Bank (ECB) should hold interest rates at or near record highs through next year to extinguish price pressures, the International Monetary Fund said on Wednesday. The Republic experienced the largest drop in GDP of any euro zone country in the third quarter and has seen unemployment rise for three consecutive months. They have also led to speculation that the euro zone may dip into a technical recession (back-to-back quarters of negative growth) in the second half of 2023. They suggest Europe’s economy is being hampered by high interest rates, the ongoing cost-of-living crisis and weaker demand from the global economy.
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