ECB to Cut Rates Amid Sluggish Growth

The European Central Bank (ECB) is likely to cut interest rates at its meeting on October 17, driven by weak economic growth and inflation below the 2% target, according to sources including French Central Bank Chief Francois Villeroy de Galhau. Villeroy advocates for a gradual approach, supported by Governing Council member Mario Centeno and ECB President Christine Lagarde, with markets anticipating rate reductions for October and December. The ECB aims to reach a 'neutral' interest rate by 2025 if inflation stabilizes at 2% and economic growth remains sluggish. Despite recent geopolitical tensions and oil price hikes, the ECB plans to overlook temporary shocks unless they affect underlying inflation.