The European Central Bank (ECB) left policy rates unchanged at 4% in October, ending a streak of 10 hikes over 14 months that pushed up its main rate by 450 basis points. While we may not have seen the last increase, the focus has shifted towards when the ECB might start to cut. We remain skeptical that the ECB will deliver rate cuts as early as the market expects. Although economic momentum in the euro area is weak, labour markets remain in good shape and underlying inflation appears sticky. Accordingly, while the latest quarterly ECB staff projections show considerably weaker near-term growth than expected earlier ... (full story)