Monetary policy|Interest rates will be decided next time in less than three weeks.
Still several of the members of the European Central Bank’s monetary policy-making council are leaning towards lowering interest rates in September, seven sources tell news agency Reuters.
The Council will meet to decide on policy rates on Thursday, September 12. According to Reuters’ sources, only a significant surprise could prevent a rate cut.
The central bank started interest rate cuts in June, but kept them unchanged in July. In June, key interest rates were cut by 0.25 percentage points.
In July the increase in consumer prices, i.e. inflation, was 2.6 percent, while according to the central bank’s price stability goal, it should be two percent.
Inflation has slowed significantly over the course of the year, as a year ago in July it was 5.3 percent.
“We are largely where we want to be,” said the Governor of the Central Bank of Latvia Martin Kazaks.
The governor of each euro state’s central bank is ex officio a member of the monetary policy-making council.
In the financial markets, the probability of an interest rate cut in September is estimated to be 90 percent, and in addition, investors expect at least one more interest rate cut later this year.