Central Bank of Ireland governor Gabriel Makhlouf said the European Central Bank (ECB) would need to see “overwhelming” data to make a big interest-rate cut in December, even as he insisted he is “chilled” in the view that inflation will reach the organisation’s 2 per cent target next year.
Speaking to reporters at a Central Bank conference in Dublin on the financial system, Mr Makhouf said that he “wouldn’t go so far as to say” that a fourth rate cut since June is all-but inevitable next month.
“It’s reasonable to assume that we’re on a downward trajectory when it comes to interest rates. Are we going to cut in December or are we going to wait until the next meeting? Well, that will just depend on the data will tell us,” he said, adding that ECB staff will issue fresh inflation forecasts ahead of the governing council meeting on December 12th.
While some governing council members see ECB staff projecting that the 2 per cent rate will be reached as early as the first quarter of 2025, Mr Mahlouf said that he is “confident that we are going to meet our target next year” but is “completely chilled” about when during the year.
“I think all of us should chill out a bit about whether it’s doing to be Q1, Q2 or Q3,” he said.
The governor declined, when asked, to comment on the spending plans of various parties ahead of the general election at the end of the month.
“I think all the politicians know what I have said about the economy, about the state of finances, because my letters [to finance ministers] and my comments were all public,” he said.
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