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ECB preparing the ground for rate cuts in June

Next week, we expect the ECB to signal clearly that as long as economic developments are broadly in line with official forecasts, it will cut interest rates in June. There is a decent case for a 50bp cut, but for now 25bp looks much more likely. That would take the deposit rate down to 3.75%. The Bank is likely to avoid committing to, or even commenting on, any particular path for interest rates beyond June.

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