Makhlouf Says June ECB Cut Possible If Price Trend Persists
The European Central Bank should be able to cut interest rates at its next meeting if the trend in inflation persists, Governing Council member Gabriel Makhlouf told the Irish Daily Mail.
(Bloomberg) -- The European Central Bank should be able to cut interest rates at its next meeting if the trend in inflation persists, Governing Council member Gabriel Makhlouf told the Irish Daily Mail.
“Our next meeting is in June and if everything continues to move in the direction that it appears to be moving I think we’ll be in a much better position in June, I’m hoping that we’re going to be much more confident about the data to feel that actually we can make a move in June,” he was cited as saying.
“The working assumption is that we do 25, I’d never rule out a 50 basis points but it would be pretty unusual,” he told the paper. “It would be something surprising to happen to lead us there.”
The ECB policymakers last week left the deposit rate at a record-high 4% for a fifth meeting, while signaling that cooling inflation will soon allow them to start cutting rates.
Asked by CNBC on whether the ECB has seen adequate evidence to countenance lowering borrowing costs, Makhlouf suggested that officials are nearly there.
“We’re pretty close to it now,” he said. “We’ve now over the last few weeks seen enough data to say we’ve reached the top of the ladder” and “all things being equal” the ECB will cut rates in June, he added.
Questioned on whether the ECB will cut three or four times, the governor wouldn’t be drawn on the specifics.
“I would rule out trying to predict how many more moves there may be — there may be none, there may be more than one,” he said. “But I think meeting by meeting is the way to do it. There’s too much uncertainty.”
--With assistance from Olivia Fletcher.
(Updates with more comments in final paragraph)
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