The ECB policy meeting for October marked a firm shift in the focus of the Governing Council away from inflation towards growth concerns in the Eurozone.
The policy easing represented the first consecutive rate cuts from the ECB in 13 years and the decision was unanimous.
On inflation, while the headline rate is now below target at 1.7% in September, this reflects prior weakness in energy prices in the month, which has unwound somewhat in recent weeks.
Unless incoming data surprise significantly to the upside of expectations, which seems unlikely, the ECB’s data dependent approach will likely see it cut rates again in December by 25bps.
