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Faster fall in inflation might not prompt ECB rate cuts

In contrast to the past few years, when the risks to the euro-zone inflation outlook have been consistently skewed to the upside, those risks now look more balanced. So in this Focus, we explore the downside risks and how the ECB might respond to them. The key point is that even if inflation falls faster and further than we expect, the Bank might not start cutting interest rates sooner than we are forecasting.

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