May 23, 2018 / 4:30 PM / a year ago

JPMorgan pushes ECB rate hike forecast to June 2019 after PMI fall

FILE PHOTO: A sign outside the headquarters of JP Morgan Chase & Co in New York, U.S., September 19, 2013. REUTERS/Mike Segar/File Photo

LONDON (Reuters) - JPMorgan said on Wednesday it has pushed back rate hike expectations from March 2019 to June 2019 after a business survey showed that euro zone economic growth slowed much more sharply than expected this month.

IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), considered a gauge of economic health, slowed in May to an 18-month low of 54.1 from 55.1, below all forecasts in a Reuters poll, which predicted a reading of 55.0.

JPMorgan said it has also cut its growth forecast for the second quarter of 2018 to 2.5 percent from 3 percent previously.

“The level is still consistent with growth a tick above a 2 percent pace, which is in line with the latest ECB staff forecast. But, the trajectory remains a concern,” analysts for the bank said in a note.

Reporting by Abhinav Ramnarayan, editing by Karin Strohecker

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