ECB Vice-President Luis de Guindos told the European Parliament on Thursday that the central bank would cut interest rates in June if data developments continued to show improving inflation.
“We have been very clear on monetary policy. If the situation continues to develop as it has recently, in June we will be ready to reduce monetary policy restrictions,” Gindos said at a hearing of the European Parliament’s Economic Affairs Committee.
Gindos said inflation was falling and that the European Central Bank (ECB) forecast it would maintain that trajectory, albeit at a more moderate pace, reaching its 2% target in 2025.
However, the ECB vice president acknowledged that there are some risks that could affect price movements, including changes in wages, productivity, unit labor costs, profit margins and geopolitical risks.
The former Spanish Economy Minister said that current interest rate levels are an important contributor to the deflation process and that monetary policy will remain restrictive as long as necessary.
Last week, ECB President Christine Lagarde already opened up the possibility of cutting rates at the next ECB meeting in June.
Eurozone inflation stood at 2.4% in March, up from 2.6% in February.
This Wednesday, in an interview with CNBC, the head of the Bank of Portugal (BdP), Mario Centeno, noted that, given the current circumstances, the ECB is able to go further and cut interest rates several times this year, including already this year. June.
Author: Lusa
Source: CM Jornal
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