According to Jinshi, Metzler analysts Leon Ferdinand Bost and Eugen Kelle said in a report that the European Central Bank will be cautious in cutting interest rates because it is still concerned about high inflation in the service industry and still high wage growth.

A second reason to expect a cautious approach, they added, is that big rate cuts are also not the ECB’s style, at least outside of emergencies.

Metzler expects the ECB to cut rates by 50 basis points over the rest of the year after an initial 25 basis point cut in June.