Stable inflation in Eurozone supports a rate cut scenario during June

Inflation in the 20-nation euro zone stabilized at 2.4% in April 2024, while the economy returned to growth in the first quarter, according to preliminary figures published on Tuesday.

The headline inflation rate of 2.4% was in line with economists’ expectations, as core inflation, excluding energy, food, alcohol and tobacco, fell to 2.7% from 2.9% in March, according to “Reuters.”

Meanwhile, GDP rose 0.3% during the first three months of the year, after a 0.1% contraction in the fourth quarter in the euro zone.

Market expectations are growing that the European Central Bank will start cutting interest rates at its next monetary policy meeting on June 6. Money market prices currently indicate a roughly 70% chance of a cut in interest rates in June, according to London Stock Exchange data, with higher bets that interest rates will be cut in July or September.