ECB chief economist admits June rate cut ‘would not be a surprise’
European Central Bank (ECB) chief economist Philip Lane acknowledged that the latest data had boosted confidence that inflation will “soon” return to targetwhich appears to be directing the institution’s Governing Council to make its first interest rate cut at its June meeting, which “would not come as a surprise” to the Irishman.
In an interview with El Confidencial collected by Europa Press, the ECB chief notes that both the preliminary estimate of eurozone inflation corresponding to April and the GDP data for the first quarter. increase your confidence that inflation will “soon return to target.”
“My confidence level has improved since our meeting in April. But of course we’ll get more data between now and June,” Lane admitted, suggesting the market believes a rate cut will occur at that time. So the fall will not be a surprise“.
However, he cautions that while the latest data is an important piece of information the agency hoped to know when the Council meets again in June, it will already have inflation data for next month, as well as more information on wage trends.
“There is no need to make statements with too much confidence. We will use these weeks to study the data as it comes in.” emphasizes.
The ECB’s influential chief economist thus joins the views expressed in recent weeks by some of the most powerful members of the central bank’s executive, such as Vice President Luis de Guindos, who was recently considered “fait accompli” that the institution will decide to ease eurozone monetary policy restrictions in June, as long as there are no surprises.
Spain, driven by tourism and European funds
On the other hand, Lane expresses his satisfaction with the “good performance” shown by the Spanish economy, which has benefited, among other things, from better tourism development as well as from the support of European funds.
“The question that is interesting not only in Spain, but in general, is that There has been a steady improvement in the tourism sector. And this is not only an internal problem. It is obvious that there is a recovery in international tourism, for example from North America to Europe,” the Irishman emphasizes.
Likewise, the ECB chief also points out the importance of EU Next Generation funds for Spain and other beneficiary countries, for which he warns that while Spanish economic growth is positive, all recipients “must focus on implementing investment plans, in addition to reforms.