Barclays: The European Central Bank is expected to cut interest rates by 25bp next week.

On April 9, Barclays economists said in a report that the European Central Bank may cut the policy rate by 25 basis points on April 17, bringing the deposit rate to 2.25%. They said this expected decision would be justified as inflation continues to decelerate, close to the ECB’s medium-term target of 2%, and downside risks to growth will become a reality. They said the ECB is likely to continue to describe the risks to the inflation outlook as bidirectional, remain cautious, avoid providing policy guidance for future decisions, and stick to a meeting-by-meeting approach. Barclays expects the ECB to cut rates by 25 basis points at each meeting until October, by which time the deposit rate will reach 1.25%.