ECB Special: A key moment in the post-pandemic monetary cycle

Capital Economics Weekly Briefing

The European Central Bank is likely to become the first major advanced economy central bank to cut rates since the end of the pandemic when it meets this Thursday – easing policy ahead of the Federal Reserve and the Bank of England.

It’s a move that’s been well flagged by ECB officials, but it’s also one that they probably wouldn’t have signalled quite so strongly given what the latest inflation data show.

In this special episode of The Weekly Briefing from Capital Economics, Europe economists Andrew Kenningham and Jack Allen-Reynolds preview a key moment in the global economy’s post-pandemic inflation-interest rate cycle.

They explain the rationale for this Thursday’s likely move and why the path ahead for easing is less assured. Andrew and Jack also put this ECB decision in its international context, exploring the risks around lowering European rates even as the Fed stands pat.