1234 GMT - The eurozone's economic prospects are worse than most think, pushing the European Central Bank to cut rates by more than expected by the market, Capital Economics' Jack Allen-Reynolds says in a note. Data showing flat growth of the euro area in the fourth quarter comes after January activity surveys say activity got off to a slow start in 2025 too, he comments. The bloc's labor market is also loosening--unemployment ticked up to 6.3% in December--contributing to declining wage growth and services inflation this year, the analyst notes. That will in turn prompt the ECB to cut interest rates further, to 1.5% later this year from 3% at the start of 2025, he says. (edward.frankl@wsj.com)

(END) Dow Jones Newswires

January 30, 2025 07:34 ET (12:34 GMT)

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