ECB Deputy President Luis de Guindos said in an interview on Thursday90freespinsnodepositA 25 basis point rate cut next month seems reasonable.
90freespinsnodepositHe said: "Our decisions at the June meeting were very transparent. We are taking a cautious approach and supporting a 25 basis point rate cut."
Kindos also said: "There is a large degree of uncertainty. We have not decided on the number and extent of interest rate cuts. We will observe how economic data evolves."
When asked if a rate increase was possible, Kindos said,"That's not our basic scenario assumption."
He said: "It depends on how inflation develops. We believe prices will fluctuate in the short term and will continue to approach our definition of price stability, which is 2% by 2025."
"But there are also some risks: how wages evolve, how productivity changes, and falling unit labor costs and profit margins are all major factors. There are also geopolitical risks and uncertainties-the Russia-Ukraine conflict, conflicts in the Middle East, and possible tensions in Southeast Asia. We must be very cautious. Nothing is predetermined about interest rate cuts or interest rate changes."