(Bloomberg) -- The European Central Bank is increasingly likely to lower borrowing costs again at its meeting next month, but what happens beyond that is less certain, Governing Council member Madis Muller said.
“We can be increasingly confident that in September, it’s possible to lower policy rates,” the Estonian central-bank chief told Bloomberg in Tallinn, citing a slower wage gains and other data that have developed broadly in line with ECB projections.
With price growth slowing and economic momentum stuttering, ECB officials have signaled another cut on Sept. 12. In August, prices rose 2.2% from a year ago, down from 2.6% last month, according to figures released Friday.
Still, some policymakers are cautioning that the fight against inflation isn’t over. Executive Board member Isabel Schnabel said earlier in Tallinn that policy easing “cannot be mechanical” as inflation’s path back to the 2% target rests on several critical assumptions. Bundesbank President Joachim Nagel said Thursday that there’s no rush to lower rates.
Muller agreed that officials must keep an open mind about the policy path.
“If the actual developments continue to be in line with the projections and we see some further deceleration in inflation, also when it comes to the core numbers and services inflation, then I also believe that it’s possible to ease further beyond September,” he said. “But to what extent, I think it’s too early to say.”
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