Sources: European Central Bank policymakers' economic views are divided, and doves remain a minority
Widening divisions among European Central Bank policymakers over the outlook for economic growth could influence the interest rate cut debate in the coming months, sources said. Some fear a recession, while others focus on lingering inflationary pressures. Future policy decisions could be more complicated as the eurozone economy moves into a more precarious state. At the heart of the debate is how weak growth and a potential recession will affect inflation - the central bank's ultimate focus as it tries to bring it down to 2% by the end of 2025. Policy doves remain in the minority, arguing that the economy is weaker than expected and recession risks are rising, while companies that had been hoarding labor are starting to cut job openings, leading to a weak job market. Once employment decreases, disposable income also decreases, rapidly eroding consumption and leading to a self-reinforcing recession.