LONDON, May 24 Reuters Danske Bank said on Friday it expects the European Central Bank only to cut interest rates twice this year, not three times, while Barclays also scrapped a call for a July reduction.

Markets currently show traders are pricing in around 60 basis points39; worth of cuts that would bring the ECB39;s benchmark interest rate to around 3.4 by December.

Piet Haines Christiansen, Danske chief analyst and a closely followed ECB watcher, said in a note he expected a political cut in June, but nothing in September.

We have revised our ECB rate path for the first time in more than 12 months and now expect the ECB to deliver two rate cuts this year June and December, and three cuts next year. This will bring the deposit rate at 2.75 by the end of 2025, he said.

It was Danske39;s first change to its forecast in more than a year and Christiansen said his team expected the ECB to repeat its meetingbymeeting and datadependent approach to monetary policy beyond June.

The updated June staff projection is expected to suggest that the prevailing economic and monetary policy narrative stays broadly unchanged and we expect the rate cut to be formulated as a rollback of the 39;insurance hike39; from September last year, Christiansen added.

Markets had expected at least five rate cuts in 2024 just a few months ago, but traders have since revised those estimates due to a stickness in inflation and some bumper recent pay deals that suggest it could stay that way….