ECB preview: From gradual to steady easing

We expect the ECB to cut its deposit rate by 25bp at its October meeting. While there will be no direct guidance with resp ect to the future rate path, we think that the overall message of the October meeting will be one of increased confidence in the inflation outlook. That said, the stickiness of services inflation remains a thorn in the side for the ECB. A moderation in wage growth remains a necessary condition for a steady, meeting-by-meeting path of rate cuts . We forecast 25bp cuts at each meeting until the deposit rate reaches 2% in June 2025.