ECB to cut interest rates further as prices converge towards goal, De Guindos says

MADRID (Reuters) – The European Central Bank is on its path to cut interest rates further as recent euro zone data show inflation is on track to reach the bank’s 2% goal, its Vice-President Luis de Guindos said on Thursday.

At a banking event in Madrid, De Guindos said if inflation was effectively converging towards target and the ECB’s projections were being met, “evidently the bias and evolution of the monetary policy, beyond what happens in December or January, will be accordingly.”

The ECB cut its key interest rate by 25 basis points to 3.25% last month – its third cut this year.

Policymakers are now debating how far interest rates may need to fall and how to signal their plans to investors.

De Guindos said recent news on inflation in the euro zone has been “good” though “not so good” on economic data.

“Inflation has come down quite a lot, all indicators on core inflation are heading in the right direction (…) but there’s an element of uncertainty now on services.”