{"id":38474,"title":"ECB Rate Cut Delay Draws Criticism from Leading Eurozone Economists","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2025-01-05T14:52:30+00:00","modified":"2025-01-05T14:52:30+00:00","canonical_url":"https://stockmark.it/ecb-rate-cut-delay-draws-criticism-from-leading-eurozone-economists/","markdown_url":"https://stockmark.it/ecb-rate-cut-delay-draws-criticism-from-leading-eurozone-economists.md","json_url":"https://stockmark.it/ecb-rate-cut-delay-draws-criticism-from-leading-eurozone-economists.json","category":"EU","categories":["EU","European Union","Eurozone"],"format":"news","language":"en-GB","content":"Nearly half of economists surveyed by the Financial Times have criticised the European Central Bank (ECB) for being too slow to implement interest rate cuts, suggesting the institution is falling behind market expectations and economic realities.\n\nThe comprehensive survey, encompassing 72 Eurozone economists, revealed that 46 per cent believe the central bank has ‘fallen behind the curve’ in its monetary policy decisions. A marginally smaller proportion, 43 per cent, maintained that the ECB’s approach remains appropriate, whilst no economist suggested the bank was ahead of schedule.\n\nSince June, the ECB has implemented four rate reductions, bringing rates down from 4 per cent to 3 per cent, responding to faster-than-anticipated inflation decreases. ECB President Christine Lagarde has signalled further rate cuts in 2025, acknowledging the Eurozone’s anaemic growth prospects. IMF projections indicate a mere 1.2 per cent expansion for the currency bloc next year, substantially trailing the United States’ expected 2.2 per cent growth.\n\nMarket forecasts suggest a widening gap between Eurozone and US interest rates by year-end. Whilst the Federal Reserve anticipates just two quarter-point cuts in 2025, market participants expect the ECB to deliver between four and five 25-basis-point reductions.\n\nProfessor Eric Dor from IÉSEG School of Management highlighted mounting concerns about economic growth risks, stating the ECB’s cautious approach to rate cuts has negatively impacted economic activity. The majority of surveyed economists project Eurozone inflation will stabilise at 2.1 per cent next year, marginally above the central bank’s target.\n\nThe survey also revealed a significant shift in sovereign debt risk perception, with France replacing Italy as the Eurozone country most vulnerable to sudden bond market pressures. This change follows recent political turbulence in France, including the collapse of Michel Barnier’s government over proposed deficit-reduction measures."}