Expected Interest Rate Cut from the ECB in January

Moody's Analytics economist Kamil Kovar stated that the European Central Bank will not shy away from cutting interest rates this month despite rising inflation in the Eurozone. According to economists' expectations, Eurozone inflation rose to 2.4% in December, up from 2.2% the previous month. Kovar mentioned that the persistently high service inflation will be particularly concerning for ECB policymakers. However, he added, “We expect a rate cut in January, as the inflation report is not bad enough to change the balance of power in the governing council.”