(Bloomberg) -- Easing inflation pressures and a deteriorating euro-zone economy support the case for an interest-rate cut this month, European Central Bank Governing Council member Olli Rehn said.
“We have received further confirmation from recent statistical data that inflation is slowing down,” the Finnish central-bank chief said Tuesday. “This means, at least in my eyes, that there have been more grounds for lowering rates at our October meeting. The recent weakening of the euro area’s growth prospects tilts the scales in the same direction.”
The remarks come a day after President Christine Lagarde indicated the ECB is becoming more optimistic that it will be able to get inflation under control — comments that hint at building momentum for a rate reduction on Oct. 17.
Rehn repeated the official stance that the ECB is data dependent — “let’s follow the figures closely and make a comprehensive analysis before making decisions, as always.”
While the ECB’s two cuts to date during this cycle came at meetings that coincide with new economic projections, markets see a more than 85% likelihood that another will follow at this month’s non-forecast gathering.
“The prevailing headwinds for economic growth that I mentioned mean I can’t yet declare that a so-called soft landing is ensured,” he said. “This should be taken into account in the future decision-making of monetary policy, without jeopardizing price stability.”
(Updates with comments on October move starting in first paragraph)
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