de Guindos Plays Down Need For Rate Cut Talks, Warns Of Downside Risks To Growth

The ECB has published an interview with Vice President de Guindos. The major comments are in line with ideas put forward by President Lagarde in recent times, warning of downside risks to growth and playing down the need for discussion re: rate cuts. Some key comments are flagged below.

• "The evolution of inflation has been positive overall: it was above 10% only one year ago and it has now fallen to 2.9%. At the same time, core inflation has also been moderating. But we have to be prudent and cautious, as there are some risks around the outlook for inflation over the next few months. We will continue taking a meeting-by-meeting and data-dependent approach to interest rate decisions."
• "It might be premature to say it, but leading indicators point to the growth outlook being somewhat more negative than we previously projected. As regards inflation, the evolution may not be very different from what we projected in September."
• When questioned on the idea of cutting rates de Guindos noted "we are not there yet. We will see how things evolve month by month, but our approach now is to keep interest rates at this level long enough to reach our target. Any discussion about lowering interest rates is clearly premature."