ECB to cut interest rates further as prices converge towards target, says De Guindos

The European Central Bank is on track to cut interest rates further as recent euro zone data shows inflation is on track to hit the bank's target of 2%, its vice president Luis de Guindos said on Thursday. .

At a banking event in Madrid, De Guindos said that if inflation did indeed converge towards the target and the ECB's projections were met, “evidently the bias and evolution of monetary policy, regardless of what happens in December or January, will be consistent.”

The ECB cut its key interest rate by 25 basis points to 3.25% last month, its third cut this year.
Policymakers are now debating how far they need to lower interest rates and how to communicate their plans to investors.

De Guindos said recent news on inflation in the euro zone has been “good” although “not so good” in terms of economic data.

“Inflation has gone down quite a bit, all the core inflation indicators are going in the right direction (…) but now there is an element of uncertainty in services.”