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Will falling inflation push the ECB into bolder action?

The recent run of weak economic data prompted the ECB to cut its policy rate last week. But as inflation itself continues to fall, pressure on the ECB to loosen monetary policy further is likely to intensify. The Bank’s next move looks most likely to be another cut in interest rates and the imposition of a negative deposit rate. We think that such a move is likely later this year, perhaps in Q3.

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