Rate cut prospect climbs for Irish borrowers as eurozone inflation outlook ‘collapses’

The chance of the ECB being forced into decisive action to cut interest rates increased significantly as market expectations for inflation “collapsed” to a new low, a leading economist has said.

Dermot O’Leary, chief economist at Goodbody, said the closely-watched measure, tracking the outlook for eurozone inflation, slumped on Wednesday to below 1.2%, putting it further behind the ECB’s target of 2%.