The ECB path beyond July

"Our interpretation of the recent ECB commentary is that the Governing Council is likely to cut rates again in September if the incoming data broadly support the staff projections, which see inflation close to 2% from mid-2025. We expect only limited further inflation progress over the summer, with core inflation moving sideways at 2.9% until August (the last report releases ahead of the September 12 meeting). This might imply some upward pressure on the near-term inflation profile in the September staff projections and could entail a pause in case of significant upside surprises in inflation and wage growth during the summer."