Analyst: Strong service sector inflation may pose a challenge to the European Central Bank's interest rate cuts

On January 29, Jinshi Data reported that Royal Bank of Canada Capital Market analysts said in a report that the European Central Bank previously expected that service sector inflation would slow significantly in 2025, allowing for more interest rate cuts, but stronger-than-expected service sector inflation may challenge this expectation. The Royal Bank of Canada said that seasonally adjusted service sector inflation data has been strong in the first few months of each year for the past two years, but weak in the following months. The Royal Bank of Canada said that if this trend continues, service sector inflation continues to rise in the first half of the year, which may result in a lower-than-expected interest rate cut by the European Central Bank.