The European Central Bank will probably cut interest rates on Oct 17 as economic growth is weak and this raises the risk that inflation will undershoot its 2% target, French Central Bank Chief Francois Villeroy de Galhau told an Italian newspaper.

Investors are preparing for a 25-basis-point rate cut by the European Central Bank on October 17, following signs of easing inflation and economic slowdown. ECB President Christine Lagardes recent comments,

With eurozone disinflation broadening, markets now price in six consecutive 25bp cuts from the European Central Bank, including one in October.

Euro-area inflation slowed below the European Central Bank’s 2% target for the first time since 2021 — backing investor bets that interest rates may be lowered more quickly than previously anticipated.

Euro zone inflation dipped below 2% for the first time since mid-2021 in September, reinforcing an already solid case for a European Central Bank rate cut this month as a three-year battle to tame runaway price growth nears its end.

Eurozone inflation drops to 1.8 per cent in September; the first time it has fallen below 2 per cent since mid-2021, strengthening the expectation of further interest rate cuts by the European Central Bank (ECB) this month.