(Bloomberg) -- The European Central Bank should continue to cut borrowing costs as consumer-price growth is nearly in check, according to Governing Council member Martins Kazaks.
“Next week we have the next ECB council meeting and in my view we have to take a decision to lower interest rates,” he told Latvia’s TV3 on Monday. “We see that the inflation problem will soon end, and that means that we can lower rates.”
Such a move at the Dec. 12 rate decision is widely expected and would be the fourth in the easing cycle that kicked off in June. What happens after that is less clear, with geopolitical uncertainty clouding the outlook.
“Of course uncertainty is very high, of course we don’t know the first steps of Donald Trump when he takes office, tariffs could also slow again Europe’s economy, but altogether the story is that Europe’s economy is going from its lowest point upwards.”
Speaking in a separate interview with the Financial Times, Chief Economist Philip Lane said that the impact of potential US trade levies could hit euro-area inflation in “both directions.”
“It’d be very important, I think, not to say that there’s necessarily a net bias in either direction,” he said on an FT podcast aired Monday. “I can list out disinflationary forces, I can list out some inflationary forces. And then, when you put all of that together, what exactly happens will very much depend on the exact sequence of events.”
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