2024-04-19 05:31:10
The vice-president of the ECB, Luis de Guindos, said this Thursday in the European Parliament that the central bank will cut interest rates in June if the evolution of data continues to show an improvement in inflation.
“We have been very clear regarding monetary policy. If things continue to evolve as they have been lately, in June we will be prepared to reduce monetary policy restrictions”, said Guindos, at a hearing of the European Parliament’s Economic Affairs Committee.
Guindos states that inflation has been falling and that European Central Bank (ECB) projections expect it to maintain this trajectory, albeit at a more moderate pace, reaching the 2% target in 2025.
The risks
However, the ECB vice-president acknowledged that there are some risks that could influence price developments, including developments in wages, productivity, unit labor costs, profit margins and geopolitical risks.
The former Spanish Economy Minister argued that current interest rate levels are an important contribution to the disinflation process and that monetary policy will remain restrictive for as long as necessary.
Relief coming. Interest rates are lower in Luxembourg
Last week, ECB President Christine Lagarde already opened the door to a rate cut at the next ECB meeting in June.
In March, euro zone inflation was 2.4%, below the 2.6% in February.
This Wednesday, in an interview with CNBC, the governor of the Bank of Portugal (BdP), Mário Centeno, considered that, given the current circumstances, the ECB is able to move forward with several cuts in interest rates this year, including already in June.
2024-04-19 05:31:10