Traders are increasingly betting on the European Central Bank (ECB) implementing at least one half-point interest rate cut by mid-2025. These bets have predominantly centered around options linked to the three-month Euribor funding rate, which is set to expire in June. The accumulation of these wagers has intensified since the beginning of the year, indicating market expectations for a shift in monetary policy.
In the United Kingdom, a report from Bloomberg Economics suggests that the country may experience more frequent technical recessions due to a significant slowdown in its economic growth potential. The analysis indicates that the UK's trend growth rate has decreased from an average of 2.5% between 1955 and 2009 to an anticipated 1.2% in the coming years. This decline renders the economy more susceptible to growth shocks, raising concerns about its stability.