The weakening inflation outlook in the eurozone supports the European Central Bank's interest rate cut

Inflation in the eurozone will be lower than previously forecast because of higher US tariffs, according to an agency survey that supports the case for the European Central Bank's interest rate cut this week. Analysts expect consumer prices to rise by an average of 1.9 per cent in 2026 and 2 per cent in 2027, both of which have been revised downwards by 0.1 percentage point. They also expect the economy to grow by 0.8 per cent this year, slightly lower than previously expected, after which growth momentum will pick up. In a separate survey, economists forecast two more rate cuts by the ECB in April and June. "Even if the US suspends tariffs, the April rate cut still makes sense," said Greg Foujesse, economist at JPMorgan. "A rate cut in June probably won't be too controversial either," he said, though the path after that depends on how trade talks with the United States develop.