The European Central Bank (ECB) will cut its deposit rate by 25 basis points on Oct. 17 and again in December, according to more than 90% of economists polled by Reuters who now see a quicker decline in euro zone inflation.

With eurozone disinflation broadening, markets now price in six consecutive 25bp cuts from the European Central Bank, including one in October.

Euro-area inflation slowed below the European Central Bank’s 2% target for the first time since 2021 — backing investor bets that interest rates may be lowered more quickly than previously anticipated.

Euro zone inflation dipped below 2% for the first time since mid-2021 in September, reinforcing an already solid case for a European Central Bank rate cut this month as a three-year battle to tame runaway price growth nears its end.

Eurozone inflation drops to 1.8 per cent in September; the first time it has fallen below 2 per cent since mid-2021, strengthening the expectation of further interest rate cuts by the European Central Bank (ECB) this month.