Market News

ECB can continue to gradually lower rates, Panetta says - REUTERS

JULY 10, 2024

ROME, July 9 (Reuters) - The European Central Bank can continue to gradually reduce interest rates without jeopardising a current fall in inflation, governing council member Fabio Panetta said on Tuesday.

The ECB cut rates for the first time in June from their record highs, but has made no explicit commitment on a follow-up move.
"The reduction of official rates can proceed gradually, accompanying the return of inflation towards the objective, if macroeconomic trends remain in line with the ECB's expectations," Panetta, who is governor of the Bank of Italy, told bankers at a conference in Rome.

Panetta is widely considered a monetary policy dove.
He played down concerns over persistently high service sector prices, saying it was normal their decline should lag that of goods prices, and said wage growth can also be expected to moderate.
"Past interest rate hikes are still dampening demand, output and inflation and will continue to do so in the months to come," Panetta said.

At the same conference, Italy's Economy Minister Giancarlo Giorgetti reiterated his call for an acceleration of interest rate cuts.
Advertisement · Scroll to continueReport this ad

"A further contraction in demand could prove unsustainable and in any case difficult to bear for economies like Italy's that need to breathe," Giorgetti said.


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics