Capital Economics: The European Central Bank may cut interest rates again next year

Falling inflation in the eurozone is likely to cause the European Central Bank to cut interest rates again next year. The ECB has kept its key interest rate unchanged in the past few policy meetings, the eurozone economy has shown resilience and inflation is largely under control. But Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said slower wage growth and lower commodity prices could cause core inflation to fall below 2 per cent next year, with headline inflation falling further as energy prices soften. This could prompt the ECB's rate-setters to lower borrowing costs. (Golden Ten)