ECB rate-cut expectations start to unravel before first move

Some economists reckon sticky inflation, rapid wage growth, and surprisingly robust eurozone output will constrain monetary loosening

European Central Bank president Christine Lagarde. Inflation picked up to 2.6% last month from 2.4% in April — more than expected.

Strong economic data and vocal European Central Bank hawks are pushing some analysts and investors to waver in their expectations for interest-rate cuts this year.

While most economists still foresee quarterly reductions following this week’s initial move, some reckon sticky inflation, rapid wage growth and surprisingly robust eurozone output will constrain monetary loosening.