ECB’s Simkus Says Likelihood of October Rate Cut Is ‘Very Small’

(Bloomberg) -- There’s little chance that the European Central Bank will lower interest rates again next month, according to Governing Council member Gediminas Simkus.

While officials want to maintain flexibility and to continue to make data-driven decisions, another reduction in the deposit rate so soon after this month’s quarter-point cut would be “hard,” the Lithuanian official said Tuesday.

“It’s natural that the likelihood of October reduction is very small,” he told reporters in Vilnius. “It’s questionable if there’s a need for this. The euro-area economy is developing according to our forecasts and that’s been the story of the past two years.”

Simkus joins other ECB policymakers in signaling that the final meeting of 2024, in December, is the likeliest juncture for a third cut in borrowing costs. President Christine Lagarde has said a significant economic setback would be required to trigger an earlier move.