FRANKFURT (Reuters) – Following are quotes from ECB policymakers in the run-up to the Dec 12 policy meeting where a rate cut is almost certain and only the size is up for debate, with most seemingly supporting a 25 basis point reduction.
JOACHIM NAGEL, BUNDESBANK PRESIDENT, DEC 4
“Given that the disinflation process is proceeding largely as currently projected, at this stage I would have no objections if we were to continue to reduce our policy rates. But I reserve my final judgement until I have reviewed the new macroeconomic projections.
“In any case, I caution against lowering the degree of restriction too hastily. Interest rates should converge slowly and at a measured pace towards neutral territory.”
FRANCOIS VILLEROY DE GALHAU, BANK OF FRANCE GOVERNOR, NOV 28
“Seen from today, there is every reason to cut on December 12th. Optionality should remain open on the size of the cut, depending on incoming data, economic projections and our risk assessment.”
PHILIP LANE, ECB CHIEF ECONOMIST, NOV 25
“Our confidence in a return of inflation to target has been growing for some time and, in response, we have gradually reduced our policy rates over the past months. This cautious approach, rooted in the principle of gradualism, emphasises moving incrementally when faced with uncertainty about the impact of our actions on the economy.”
ISABEL SCHNABEL, ECB BOARD MEMBER, NOV 27
“Given the inflation outlook, I think we can gradually move toward neutral if the incoming data continue to confirm our baseline… I would warn against moving too far, that is into accommodative territory. I don’t think that would be appropriate from today’s perspective.”
FABIO PANETTA, BANK OF ITALY GOVERNOR, NOV 19
“With inflation close to target and domestic demand stagnant, restrictive monetary conditions are no longer necessary. In the current phase we should focus more on the sluggishness of the real economy: without a sustained recovery, inflation risks being pushed well below target, opening up a scenario that would be difficult for monetary policy to counteract and should therefore be avoided. In short, we need to normalize our monetary policy stance and move to neutral – or even expansionary territory, if necessary.”
GABRIEL MAKHLOUF, CENTRAL BANK OF IRELAND GOVERNOR, DEC 4
“I would need to see some pretty significant evidence to push me into making a big leap of more than 25 basis points.
“I have said very specifically that I want to see services inflation fall further.”
“The data that I’ve seen since I responded to that question a few weeks ago reinforces my view that prudence and caution remain the right approach.”
OLLI REHN, BANK OF FINLAND GOVERNOR, DEC 4
“These factors (on weak growth) have increased the justification for lowering the key interest rate in December, and this direction of monetary policy is likely to continue in the coming months.”
ROBERT HOLZMANN, AUSTRIAN NATIONAL BANK, DEC 4
“As the data currently stands, I think a reduction of 0.25 percentage points is conceivable (on Dec 12), not more. But that is not yet decided.”
YANNIS STOURNARAS, BANK OF GREECE GOVERNOR, NOV 18
“A quarter-point cut in euro zone’s interest rates by the end of the year would be reasonable.”
MARTINS KAZAKS, BANK OF LATVIA GOVERNOR, DEC 2
“ Next (LON:NXT) week we have the next ECB council meeting and in my view we have to take a decision to lower interest rates,” he told Latvia’s TV3 on Monday. “We see that the inflation problem will soon end, and that means that we can lower rates.”
CHRISTODOULOS PATSALIDES, CENTRAL BANK OF CYPRUS GOVERNOR, NOV 21
“While growth in the euro area economy has been anaemic for some time now, the approach to rate cuts must be gradual and data driven. If incoming data and new projections in December confirm our baseline scenario, there would be room to continue lowering rates at a steady pace and magnitude.”
