(Bloomberg) -- Euro-area inflation plunged to the lowest level since mid-2021 – reinforcing arguments for another cut in interest rates by the European...
-- Euro-area inflation plunged to the lowest level since mid-2021 – reinforcing arguments for another cut in interest rates by the European Central Bank in less than two weeks.Consumer prices rose 2.2% from a year ago in August, Eurostat said Friday. That was significantly lower than July’s 2.6% and matched the median estimate of analysts in a Bloomberg survey.
Investors are betting on two or three more ECB cuts this year, plus additional steps in 2025. June’s landmark reduction began to unwind the unprecedented tightening campaign unleashed to tame the spike in prices that peaked at 10.6% in 2022. “Given that the path back to price stability hinges on a set of critical assumptions, policy should proceed gradually and cautiously,” she said in Tallinn, Estonia. “The pace of policy easing cannot be mechanical. It needs to rest on data and analysis.”
Separate data Friday, though, suggested further labor-market tightness as euro-zone unemployment unexpectedly dipped to 6.4%.
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