(Bloomberg) -- The European Central Bank won’t cut interest rates until the final quarter of 2024 because price pressures will prove persistent, according to Sabrina Khanniche of Pictet Asset Management.

“If we look at inflation now, currently it has declined quite substantially, but we expect inflation to increase from there,” Khanniche, who is a senior economist, told Bloomberg Television on Wednesday. “Because with a peak of energy prices were reached last year, so inflation should continue to ease but very gradually because of the persistence of inflation.”

“This is the reason why we expect the ECB to maintain rates at restrictive levels in order to make sure inflation goes back to target,” according to Khanniche. 

Her view jars with those of investors who are ramping up bets on cuts and and see a first quarter point reduction as soon as March. That’s after ECB Executive Board Isabel Schnabel described the slowdown in euro-zone consumer-price growth as “remarkable.”  

Khanniche also highlighted the risk of persistent services inflation stemming from a solid labor market, and the fact that economic activity should pick up in 2024. 

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