The European Central Bank has a "clear-cut" case for cutting interest rates at its next meeting as the euro zone's economy may face a tipping point, ECB policymaker Martins Kazaks told Reuters.

(Reuters) - Citigroup said that it now expects the European Central Bank (ECB) to cut interest rates by 25 basis points in its Oct. 17 meeting, according to a note on Tuesday.

With eurozone disinflation broadening, markets now price in six consecutive 25bp cuts from the European Central Bank, including one in October.

Euro-area inflation slowed below the European Central Bank’s 2% target for the first time since 2021 — backing investor bets that interest rates may be lowered more quickly than previously anticipated.

Major brokerages, including Goldman Sachs and JPMorgan, now expect the European Central Bank to deliver a quarter-point cut at its October 17 meeting, on the back of recent data showing economic weakness and slowing inflation.

Expectations for another quarter-point rate cut by the European Central Bank are on the rise due to growing evidence of a significant slowdown in both inflation and economic activity.

An interest-rate cut that European Central Bank officials deemed unlikely just three weeks ago now seems a near certainty when they next set policy on Oct. 17.

Euro area inflation slowing down means that there are now more reasons to justify an interest rate cut at the ECB's October policy-setting meeting, Finnish ECB policymaker Olli Rehn said in a speech on Tuesday.