LONDON, Sept 30 (Reuters) - Major brokerages, including Goldman Sachs and JPMorgan, now expect the European Central Bank to deliver a quarter-point cut at its Oct. 17 meeting, revising their forecasts on Friday on recent data showing economic weakness and slowing inflation.
Market pricing now reflects around a 70% chance of such a rate cut, which would follow reductions at the ECB's June and September meetings, as the data pushes policy makers to focus more on growth and less on price pressures.
Euro zone business activity contracted sharply and unexpectedly in September, surveys showed, as the bloc's dominant services industry flatlined and a downturn in manufacturing accelerated, while inflation in France and Spain for September came in very soft.
Sources told Reuters that ECB policy doves are preparing to fight for an October rate cut - though this would likely meet resistance from more conservative peers - a turnaround from the aftermath of the ECB's September meeting when they saw an October move as unlikely.
Reporting by EMEA markets team and the Broker Research team in Bengaluru; Editing by Amanda Cooper
