Economic growth in the euro-zone slowed in Q2 and timelier data suggest that it weakened further in Q3. That, together with the further fall in wage growth and headline inflation, all but guarantees another 25bpcut at the ECB’s September meeting. But with services inflation still high and the labour market tight, we think the ECB will continue to cut only once a quarter, a slightly slower pace of easing than anticipated by investors. Elsewhere, we think that the Riksbank will cut rates three more times this year, and that the SNB will cut again in September. Norges Bank will probably only start easing in December.
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