Uncertainty over ECB rate cut persists despite colleagues' indications
Date
8/25/2024 7:57:25 AM
(MENAFN) European Central bank (ECB) interest rates may not be reduced next month, according to Robert Holzmann, the governor of the Austrian central bank and a member of the ECB's governing council. Despite some indications from his colleagues that a rate cut is forthcoming, Holzmann expressed reservations, emphasizing that any decision will depend on forthcoming economic data. Speaking at the Federal Reserve's annual economic conference in Jackson Hole, Holzmann highlighted the need for careful analysis before making any adjustments, stating that while some of his peers are considering a rate cut, he is cautious about acting prematurely.
Investors are anticipating that the ECB will announce a rate cut during its meeting in three weeks. However, other officials, besides Holzmann, also stress that the decision will be influenced by the latest data available at that time. The persistent weakness in the European economy, particularly in Germany, is driving speculation that a rate reduction might be imminent. The ECB's previous rate decision in July maintained the main interest rate at 4.25 percent, following a 25 basis point cut in June—the first reduction since 2019.
Christine Lagarde, ECB President, indicated in July that the bank needed additional time to assess whether inflation was firmly heading towards the 2 percent target. She noted that while there were positive economic developments, a rate cut was not considered urgent at that moment. This cautious stance reflects a broader deliberation within the ECB on the timing and necessity of further monetary policy adjustments.
MENAFN25082024000045015682ID1108598243
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.