On April 23, 2024, people were seen strolling in the bustling streets of Montmartre, Paris, France. In the Euro area, price rises held steady at 2.4% in April according to flash figures published on Tuesday. The headline inflation matched forecasts at 2.4%, with a monthly inflation rate of 0.6%. Core inflation, which excludes energy, food, alcohol, and tobacco, decreased to 2.7% from 2.9% in March. The impact of lower energy prices moderated at -0.6% compared to -1.8% in March.
The gross domestic product in the Euro area rose by 0.3% in the first quarter of the year, slightly exceeding economist expectations. However, GDP for the fourth quarter of 2023 was revised from no growth to a 0.1% contraction, indicating a technical recession in the second half of the year.
Market expectations are leaning towards the European Central Bank cutting interest rates at their next monetary policy meeting on June 6. There is currently a nearly 70% probability of a rate cut in June, with even higher expectations for cuts in July or September. Several ECB members have expressed anticipation of an interest rate reduction in June to prevent a significant slowdown in the Euro area economy, citing risks from oil prices and volatility in the Middle East.
Analysts at BNP Paribas had predicted that the headline inflation rate would remain stable due to higher crude oil prices, supporting the likelihood of a rate cut in June. Beyond June, however