European Central Bank (ECB) chiefs believe a further interest rate cut in July is unlikely after some stronger-than-expected economic data, with the focus now on the September meeting, five sources told Reuters.
An ECB spokesperson declined to comment for this report.
The ECB on Thursday pushed ahead with its first reduction in borrowing costs since 2019, citing progress in fighting inflation, even as it acknowledged that price growth was likely to remain above its target for another year.
Monetary policymakers meeting in Frankfurt agreed not to give any public indication of their next meeting on July 18 as the future path for inflation is bumpy and uncertain, the sources said.
But some officials, speaking on condition of anonymity, said they thought it unlikely they would cut rates again next month in light of recent data, including strong wage growth and services inflation.
These monetary policymakers had already shifted their attention to the September 12 meeting, when the ECB will update its economic projections and have other inflation impressions to consider.
One source said a cut would be justified in September if the ECB’s inflation forecast for the final quarter of 2025 remained where it has been for some time, between 1.9% and 2.0%.
ECB President Christine Lagarde pointed to this stable projection as the main evidence supporting Thursday’s decision to cut interest rates.
Source: Terra
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