(Bloomberg) -- Danske Bank no longer predicts the European Central Bank will lower interest rates in September, citing sticky inflation and the strong start to 2024 by the euro-zone economy.

Policymakers will cut borrowing costs in June, as widely expected, and again in December, analysts led by Piet Christiansen said in an emailed note. Recent data mean the ECB can wait before embarking on a series of reductions, they said.

First-quarter growth in the 20-nation euro area exceeded estimates as manufacturing nears the end of a long slump and services continue to power ahead. With the labor market remaining robust and wages rising more than expected at the start of the year, there’s concern that inflation may take longer to return to 2%.

“We find the resilience of the European economy noticeable,” Christiansen wrote. He reckons June’s move will “be formulated as a rollback of the ‘insurance hike’ from September last year,” and that the ECB will repeat its “meeting-by-meeting and data-dependent approach to the policy rate path.”

The ECB’s final rate increase last fall was controversial and not all Governing Council members considered it necessary, though they eventually agreed that the risk of halting hikes prematurely was too high.

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