European Central Bank heads for third interest rate cut of the year [Video]

The European Central Bank is on course to deliver its third interest rate cut of the year at its meeting this Thursday, as policymakers say inflation risks are easing faster than previously expected.

Headline price rises in the euro area cooled to 1.8% in September, below the central bank’s 2% target. Core inflation, which strips out the more volatile components of energy, food, alcohol and tobacco, hit a two-and-a-half year low of 2.7%.

Those figures have broadly continued to fall even after the ECB cut interest rates by 25 basis points in June, and again by the same amount in September, with the central bank taking its key rate — the deposit facility — from a record high of 4% down to 3.5% across the …