(Bloomberg) -- The European Central Bank will be in a better position to decide on interest rates at its next Governing Council meeting in the autumn, Vice President Luis de Guindos said.
“We will have more information in September, and especially new macroeconomic projections, so we will be able to better reassess the monetary policy stance,” he told Europa Press. “Data-wise, September is a much more convenient month for taking decisions than July was.”
The ECB last week kept rates on hold, with President Christine Lagarde saying that the next policy gathering — on Sept. 11-12 — is “wide open.” While markets are counting on two more rate reductions this year, policymakers are becoming less confident such a path is realistic, and don’t want investors to assume that a cut at the next meeting is a done deal, people familiar with the matter told Bloomberg.
Guindos also said, according to a transcript of the interview published Tuesday on the ECB’s website:
- “The current level of uncertainty is huge, so we have to be prudent when taking decisions”
- “Inflation will be around current levels until the end of the year”
- “All measures of underlying inflation are coming down, therefore the disinflation process will continue from the start of next year”
- “We are already seeing that wages are starting to slow down”
- “Our surveys show that firms expect wage increases to moderate, especially as of 2025, because the current rise in wages is closely related to regaining purchasing power as a result of past inflation”
- “And if wage increases moderate, services inflation – which is most sensitive to wage developments – will moderate too, and that will enable us to reach our 2% inflation target at the end of next year”
- For full interview, click here
- Read More: ECB Cut Bets Not Fully Misplaced, But Not Baseline, Kazimir Says
--With assistance from Laura Malsch and Laura Alviž.
©2024 Bloomberg L.P.